Mint Explainer: How will Sebi’s relaxed margin rules help brokers?

What happened: Sebi relaxed margin rules for investors who use proceeds from same-day share sales to buy other stocks, easing brokers' upfront funding burden for trades using the early pay-in mechanism. Key numbers: Circular issued 22 October; rules take effect 22 February Why it matters: The relaxation could particularly help smaller brokers with limited funds offer same-day trading, and follows proposals from the Broker Industry Standards Forum and Sebi's Risk Management Review Committee. It comes amid declining cash-market activity, though impact on turnover depends on broker adoption.

Sebi relaxed margin rules for investors who use proceeds from same-day share sales to buy other stocks, easing brokers' upfront funding burden for trades using the early pay-in mechanism.

The relaxation could particularly help smaller brokers with limited funds offer same-day trading, and follows proposals from the Broker Industry Standards Forum and Sebi's Risk Management Review Committee. It comes amid declining cash-market activity, though impact on turnover depends on broker adoption.