SEBI Panel Proposes Lower Margin for Cash Market: What it Means for Investors

• A SEBI panel has approved a proposal to reduce the margin required for buying shares in the cash segment.
• The proposed change aims to encourage more investment in the cash market, which reflects the true strength of the market.
• Currently, margins range from 12.5% to 20%, including VaR and ELM; the panel suggests not going below 12.5%.
• Lower margins could allow investors to build higher-value portfolios with less capital and increase market liquidity.
• SEBI is currently back-testing data and consulting stakeholders before making a final decision.

Why It Matters: SEBI may reduce cash market margins, allowing more investment with less capital while maintaining safety.