RBI Funding Curbs: F&O Volumes May Drop 15-20%, Says HDFC Securities

• HDFC Securities predicts a 15-20% fall in F&O trading volumes after RBI's new broker funding norms take effect on April 1.
• The impact is expected to be concentrated in proprietary trading, which accounts for about 40% of F&O volume.
• New rules require brokers using bank guarantees for proprietary trades to provide 100% collateral, increasing funding costs.
• Intraday limits in derivatives will also become costlier, potentially reducing activity.
• Large brokerages handling client trades, like HDFC Securities, expect negligible to zero impact.