SEBI plans to cut MTF margins for F&O stocks
SEBI is looking to lower the margin requirements for Margin Trading Facility (MTF) deals in futures and options stocks.
The idea is to make things less expensive for both brokers and investors who use cash, with a formal consultation paper coming soon.
This move was recently given the green light by SEBI's Secondary Market Advisory Committee.
Proposed cash MTF margin VaR+3xELM
Right now, MTF trades need pretty steep margins: Value at Risk (VaR) plus five times the extreme loss margin (ELM) if you're using cash.
The new plan would cut that down to VaR plus three times ELM, making it more in line with other MTF rules.
SEBI also wants to let early pay-in credits count as collateral and tighten how brokers use their capital, so markets stay safe.
With the MTF market booming, up 60% year over year and hitting 1.14 trillion rupees in April 2026, these changes aim to help investors trade smarter without piling on risk.