Inclusion of Equity Exchange Traded Funds as list of eligible securities under Margin Trading Facility

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.... SEBI Circular No. CIR/MRD/DP/86/2017 dated August 01, 2017.  2.  Based on the feedback received from market participants, recommendation of Secondary Market Advisory Committee (SMAC) of SEBI and taking into account the emergence of Exchange Traded Funds (ETFs) as an investment product with various advantages such as transparency, diversification, lower cost, etc., it has been decided to allow units of Equity Exchange Traded Funds (Equity ETFs) categorized as Group-I security as per provisions of SEBI Circular No.MRD/DoP/SE/Cir-07/2005 dated February 23, 2005 as an eligible security for MTF as well as an eligible collateral under MTF.  3.  Accordingly, provisions under paragraphs 3, 4, 5, 6, 14 and 18 of SEBI Circu....

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....shall be required to comply with the following conditions:  (i) The stocks or units of Equity ETFs deposited as collateral with the stock broker for availing MTF ('Collaterals') and the stocks or units of Equity ETFs purchased under the MTF ('Funded stocks') shall be identifiable separately and no comingling shall be permitted for the purpose of computation of funding amount." 3.3. Leverage and Exposure Limits  Paragraph-18(b) of the aforesaid circular has been modified as under: "While providing the MTF, the stock broker shall ensure that:  b). exposure towards stocks and/or units of Equity ETFs purchased under MTF and collateral kept in the form of stocks and/or units of Equity E....

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....t to the compliance with appropriate provisions of Companies Act, 2013. A stock broker shall not be permitted to borrow funds from any other source, other than the sources stated above."  4.  The Stock Exchanges are advised to:- 4.1.  take necessary steps and put in place necessary systems for implementation of this circular; 4.2.  make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision; and 4.3.  bring the provisions of this circular to the notice of the member brokers of the stock exchange and also disseminate the circular on the website. 5.  Applicability The provisions of this circular shall come into....