SEBI plans to review MTF margin rules to streamline risk management

Markets Regulator Sebi is planning to review the margin framework under the margin trading funding (MTF) to streamline risk management in clearing corporations.

In its annual report dated 2024-25, Sebi said that “a comprehensive review exercise is currently being conducted in the context of the applicable margining framework.”

Along with this, the MTF review and under it are under consideration.

Margin trading allows investors to buy shares even if they do not have a full amount. They can only buy shares by paying a portion of the price, while the remaining cash is covered by a margin deposited in the cash or as a shares kept as collateral.

In addition to reviewing the margin rules, Sebi is also considering a change in the regulatory framework for Angel Funds. This review will focus on funds .But processes, investment status and operational aspects, with ease of doing business and the purpose of facilitating regulatory requirements.

Angel Funds play a key role in making Angel investors’ capital channel in startups requiring funds.

SEBI has proposed to review the classification of REITs and invite as hybrid devices. The move comes in response to the presentations of various stakeholders, the presence of facilities such as equity in these tools, the development of market ecosystem in the last decade and global practices.

There is also a review of the regulatory framework for mutual funds, which is intended to ensure that the rules are aligned with an effective, adaptive and developed market landscape.

As part of this, after receiving feedback from the mutual funds industry, including SEBI AMFI, is investigating the recent sanctions for asset management companies (AMCs).

In line with these efforts, SEBI intends to expand the range of allowable investment strategies under the Special Investment Fund (SIFS).

Currently, SIFS allows asset management companies to provide limited strategies in equity, debt and hybrid categories.

In terms of portfolio flexibility introduced to remove the gap between mutual funds and portfolio management services (PMS), investors in SIF framework have made at least Rs 10 lakh in all SIF strategies.