SEBI Committee Approves Margin Reduction in Equity Cash Segment to Boost Trading

• SEBI's committee has approved a proposal to reduce margins on cash transactions, aiming to promote cash market activity.
• The panel recommended collecting appropriate margins to cover risk, but not less than 12.5% of VaR and ELM.
• SEBI will conduct further data testing and seek opinions from clearing corporations, exchanges, and other stakeholders before a final decision.
• The regulator's focus is on increasing volume in the cash market, which has seen slower growth compared to equity derivatives.
• Average daily turnover in the cash market has significantly increased, reaching 1,20,782 crore rupees in FY25.

Why It Matters: SEBI committee approves margin reduction in equity cash segment to boost trading volumes and liquidity.