Sebi is unlikely to extend the deadline of April 21 for imposing a margin on institutional trade, Manas Ray, executive director, Sebi said. After addressing the conference on the Capital Market organised by PricewaterhouseCoopers (PWC), while speaking with reporters on the sidelines of the conference Ray said, ?We are not considering any extension of the April 21 deadline, as enough time has been given to institutional players?.
It may be mentioned here that the major securities market players, market custodians, stocks brokers, and foreign institutional investors (FIIs) have sought a one-month extension from Sebi with respect to the collection of upfront margins from institutional investors. The market regulator had set the deadline of April 21 for institutions to give margin for their cash market transactions on a T+1 basis and from June 16 on an upfront basis. ?We are doing this to provide a level-playing field between retail and institutional segments,? Ray said.
Deposits for margin can be in the form of cash or securities. However, stock exchanges will have to work out the kind of deposits, which they can accept as margin, he said. He said that ratio between cash and security deposits for the margin can be in equal proportion, he added.
FIIs would have to bear the increased foreign exchange risk and are subject to regulatory restrictions from borrowing locally. Presently, FIIs are exempted from paying trade margin. Market players have expressed their concerns that FIIs may not be able to fund their margins adequately on T+1 basis, primarily due to the different time zones they operate in.
Earlier, addressing the conference, Ray said that Sebi had a meeting with CII and Ficci on Tuesday for the modalities for setting up a SME platform. ?We will finalise the modalities soon?, he said.
He said that the investors? education is necessary to arrest any kind of scam. ?Even well-qualified professionals like doctors too need financial literacy?, he said.
Besides this, all market participants need to work for financial inclusion too for the healthy growth of the market. The global and Indian market is volatile. ?The Indian capital market should plan for the future?, he said.