• ‘Big discount’ in stock market


• SEBI’s big plan, margins will shrink


• Big support from SEBI to cash market

SEBI Margin reduction: If you are investing in stock market cash, there is good news for those investors. The stock market regulator SEBI is now considering reducing the margin levied on cash transactions. That is, you can buy and sell more shares even with less capital. This will increase your market share. This potential relief from the regulator will only save small investors money. But, the cash market will also get a fresh boost.

Ordinary investors will soon get an opportunity to buy more shares for less money. Sebi is considering reducing the margin charged in the cash sector, which will require investors to invest less capital than before. According to sources, a key committee of SEBI recently discussed the proposal with clearing corporations, brokers and other market participants. Although no final decision has been made yet, discussions have now formally begun.

What is Margin?

Currently, stock market cash investments require around 20% margin. Two charges are included in this.

• VaR (Value at Risk): It is the margin of possible loss due to market fluctuations.


• ELM (Loss Margin): It is an additional safety margin charged to cover losses due to abnormal market conditions.

Market experts say that many stocks have little real risk, yet 20% margin is charged. Many stocks fall into the range where the margin should be 15% or 25%, but they fall in the same range. Therefore, the committee is considering making the margin structure practical.

SEBI’s focus is to strengthen the cash market and also focus on increasing trading volume. Although the average daily volume of the cash market has doubled over the past three years, it is still significantly lower than some. Sebi Chairman Tushar Kanta Pandey said that expansion of the cash market is necessary to strengthen the Indian capital market.

Benefits of this decision of SEBI

• Trading will be cheaper for small investors.


• More shares can be bought and sold at lower prices.


• Volume in the cash market will increase.


• Lower costs will encourage more people to trade.


• Risk management will not be affected.


• Adequate margin will be maintained to ensure safety.