FIIs allowed to deposit securities as entire margin

Written by Markets Bureau | Mumbai, Apr 17 | Updated: Apr 19 2008, 04:58am hrs
In a major relief, the Securities and Exchange Board of India (Sebi) has permitted them to maintain their entire margin in the form of approved securities. Sebi had earlier asked institutional investors to deposit margins for trades carried out by them in the cash segment. The Sebi decision comes into effect from April 21. Institutional investors and foreign institutional investors (FIIs) in particular were opposed to the Sebi idea of levying margins on iinstitutional trades in the cash segment. But the regulators argument was that when it was creating a level playing field by allowing FIIs and institutional investors to short-sell in line with retail shareholders, they should also cough up margins as paid by the retail shareholders. Earlier, Sebi was expected to allow the deposit of at least 50% of the securities held by institutional investors as margins against the exposure in the cash segment.