Under the new framework, the Clearing Corporation will calculate the available EPI value on the trading day. This will be the lower of the value of EPI completed and the value of securities sold.
When a client takes another position in the cash segment on the same trading day, the Clearing Corporation will assess the client's margin availability after reducing the available EPI value.
What happens if a client squares off a position?
If a client squares off the sale position for which the EPI benefit was used, the EPI value will be removed. Any resulting margin shortfall will be blocked from the proprietary collateral of the Trading Member or Clearing Member by the Clearing Corporation.
This condition will not apply to trade-for-trade (TFT) securities, as these transactions are settled on a gross basis.
Sebi has directed Trading Members to ensure that clients square off positions or take new positions only if the required client margins are available.
When will the new rules take effect?
The circular will come into effect four months after its issuance on October 22, 2026, making February 22, 2027, the effective date.
The regulator has also directed Clearing Corporations to make the necessary changes to their rules and systems to implement the framework.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.