India’s regulator aims to broaden margin trading funding options while capping broker exposure amid a 50% surge in outstanding positions.
India’s Securities and Exchange Board proposed new rules for margin trading facilities (MTF), allowing non-convertible debentures as funding sources and expanding eligible collateral. The move aligns MTF rules with the broader cash market framework.
Outstanding MTF positions reached 1.3 trillion rupees ($13.78 billion) by mid-2026, up 50% year-over-year, according to exchange data. SEBI also proposed clearer exposure caps for brokers based on net worth and a 30-day resolution window for passive client breaches.
Currently, MTF is limited to select stocks and equity ETFs. The regulator plans a separate discussion paper to review eligible securities for margin, collateral, and lending mechanisms.