Securities Exchange Board of India vide circular dated 23rd March 2020 has notified revised criteria for entering the risk reduction mode. The revision has been made to the guidelines for operationalizing the interoperable framework among Clearing Corporations notified by SEBI through circular dated 27th November 2018.
Para 5.5(2) of the said circular has been withdrawn whereas clarification it is clarified that provisions of Para7 on “Risk Reduction Mode”of the SEBI circular, dated December 13, 2012 would be the criteria for the Stock Exchanges to determine the stock brokers which would be admitted to the risk-reduction Mode.
The circular also mandates that all stock brokers will be put in risk reduction mode when 90% of the stock broker’s collateral available for adjustment against margins gets utilized on account of trades that fall under the margining system.
Click here to read the Circular.
