Sebi Plans Review from MTF -Marge rules to streamline risk management

Markets Regulator Sebi wants to revise the margin framework under margin trade financing (MTF) in an attempt to streamline risk management when clearing companies.

In his annual report for 2024-25, Sebi said that an “extensive assessment exercise is being carried out with regard to the currently applicable margin framework.”

In addition, an overview of MTF and the scrips that are eligible below is also taken into consideration.

Investors can buy shares with margin trade, even if they do not have the full amount. They can buy shares by paying only part of the price, while the rest is covered via a margin that is deposited in cash or if shares are held as collateral.

In addition to the assessment of the margin rules, Sebi is also considering changes in the regulatory framework for Engelfonden. The assessment will focus on fundraising processes, investment conditions and operational aspects, with the aim of facilitating the convenience of doing business and streamlining the legal requirements.

Angel Funds play a crucial role in channeling the capital of angel investors for startups that need financing. Sebi has also proposed to revise the classification of Reit’s and Invites as hybrid instruments. This step comes in response to representations of various stakeholders, the presence of share -like characteristics in these instruments, the development of the market ecosystem over the past decade and global practices. An overview of the regulatory framework for investment funds is also on the maps, aimed at the fact that the regulations remain effective, adaptable and in line with the developing market landscape. As part of this, SEBI is investigating the limitations currently prescribed for Asset Management Companies (AMCs), after feedback from the Mutual Funds industry, including the AMFI.

In accordance with these efforts, SEBI intends to expand the reach of permitted investment strategies among specialized investment funds (SIFs).

SIFs are currently able to enable asset management companies to offer a limited series of strategies in categories of shares, debts and hybrid.

Introduced to bridge the gap between investment funds and portfolio management services (PMS) in terms of portfolio reflexibility, requires the SIF framework that investors commit at least RS 10 Lakh in all sif strategies.