Current Context: On 22 October 2026, the Securities and Exchange Board of India, SEBI, issued a circular introducing a margin waiver for subsequent buy and sell transactions in the cash segment against accepted Early Pay-in, EPI, of securities. The provisions will take effect four months after issuance, on 22 February 2027.
Key Points
- Early Pay-in explained: EPI involves making sold securities available for settlement before the scheduled pay-in.
- Eligibility: The client must have a net sell obligation in a settlement, and the Clearing Corporation, CC, must have successfully accepted the EPI request for the sold securities.
- Margin relief: The CC will not collect margin from the Trading Member or Clearing Member on the client’s subsequent buy/sell positions, up to the accepted EPI amount, on a real-time basis.
- Relief limit: On the trade date, the eligible EPI value is the lower of the value of securities delivered through EPI and the value of securities sold.
- Risk safeguards: If the client squares off the sale and a margin shortfall arises, the CC will block the shortfall from the member’s proprietary collateral. Trading Members must ensure sufficient client margins before permitting squaring off or new positions.
- Exclusion: The facility does not apply to Trade-for-Trade, TFT, securities.
- Significance: The measure reduces additional margin requirements for eligible trades and improves the use of clients’ available capital.
Question:
Q1. SEBI’s margin waiver against accepted Early Pay-in applies to subsequent buy/sell transactions in which market segment?a) Equity derivatives segment
b) Commodity derivatives segment
c) Cash segment
d) Currency derivatives segment
Answer: c) The waiver applies to eligible subsequent cash-segment trades up to the accepted EPI amount, subject to the prescribed conditions.
