Quick summary
The Securities and Exchange Board of India (SEBI) has issued a consultation paper on the review of the Margin Trading Facility (MTF) framework, seeking comments from the public on proposed changes.
Who is affected
The proposed changes affect stock brokers, clients, and stock exchanges.
What changes
The proposed changes include:
- Expanding the forms of eligible collateral for MTF
- Introducing a rebalancing period of 30 days for securities moving out of Group I category
- Preparing a uniform Rights and Obligations Document
- Expanding sources of funds for MTF to include borrowing through Non-Convertible Debentures (NCDs)
- Modifying the maximum allowable exposure of brokers towards MTF
- Allowing passive breaches of client-level exposure limit under certain conditions
- Increasing the minimum net-worth threshold for eligibility of stock brokers to offer MTF
- Permitting brokers in the form of Limited Liability Partnership (LLP) to offer MTF
Action items
Stock brokers, clients, and stock exchanges are invited to provide comments on the proposed changes.
Key dates-deadlines
Comments on the consultation paper should be submitted by July 09, 2026.
Source reference
SEBI consultation paper dated June 18, 2026.