Peak Margin 3rd phase: SEBI's position, how it will affect market and traders—Watch Anil Singhvi explain it all in special show at 11 am

Zee Business Managing Editor Anil Singhvi says that according to SEBI, the margin system should be extremely strong so that traders can see their risk assessment and can accordingly take their trade positions. Also, there should be some discipline in terms of trading, investment, brokers funding or taking leverage positions or intraday positions. Singhvi explains that SEBI in continuously increasing the peak margins, this is being done by SEBI to keep the markets and system strong as well as efficient.    

Singhvi said that from tomorrow onwards upfront margins will be 75%, this is the third phase of peak margin will be implied by SEBI from tomorrow. Going forward, this will be 100% by September 2021, indicating that the clients failing their obligations to Brokers will drastically reduce to absolutely zero. Brokers will only be able to do business after taking upfront margins and the peak margin requirements will move up going forward, says Singhvi.

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Singhvi said that SEBI has taken this step to ensure safety of market, investors and brokers. Singhvi explains that intraday traders, arbitragers and brokers will face issues as they will not be able to take higher positions with limited funds which they use to do. This will lead to liquidity issues in the market.

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Singhvi said that market participants will shift to taking positional traders and take delivery positions rather than doing intraday trading. He said that participants would think rather than paying 75% positions for trading it is advisable to pay 100% and take their position for delivery.            

Singhvi said that intraday traders who want to trade for a day taking leverage positions and brokers who allow these intraday traders to take higher positions for earning daily brokerages will certainly face the problem.

Singhvi said that participants who are not following the rules will have to bear the penalty; these will impact the liquidity situation in the market and the price discovery on the stock.

Singhvi said that these steps are taken by SEBI to ensure stability in markets. Also, to ensure there are no defaults either from traders or Brokers. A special show will be done today for the participants at 11 am today to help market participants understand the details about these measures and their implications.