SEBI imposes additional margin

MUMBAI, FEB. 14. The Securities and Exchange Board of India (SEBI) today decided to impose an additional 5% margin on end of the day net outstanding positions of brokers in ten scrips till the end of the settlement. These scrips are Infosys Technologies, Satyam Computers, Himachal Futuristic Communications, Silverline Technologies, NIIT, Zee Telefilm, Global Telesystems, Pentamedia Graphic, Digital Equipments and DSQ Software. In a press release issued here today, the SEBI stated, that ``Five exchanges identified these ten scrips in terms of outstanding positions, volume and volatility.'' It was also decided that the cash component of additional capital and margin should be increased and standardised. The cash component should reach the level of 50% by the end of March 2000. The SEBI said that stock exchanges would work out a phased programme to implement this. Exchanges should ensure that brokers collect margins from clients wherever the margin liability for the client exceeds Rs. 100000 and the exchanges would carry out inspections to verify that the brokers are abiding by this request. The SEBI stated that a meeting with major stock exchanges held here today felt that a significant portion of outstanding position and market activity is on account of institutional trades. ``It was considered that it would be appropriate to bring the institutional trades also under the purview of margins. The group recommended that to begin with a flat margin should be imposed. The modalities would be worked out after a meeting with the institutions within a week,'' the regulator stated. At present, the volatility margin captures six weekly volatility. It was decided that the present system of volatility margin would be further refined and strengthened to capture short term volatility also. ``The modalities in this regard would also be decided within a week.'' Exchanges were further advised by the SEBI to strengthen their surveillance and monitoring to detect market manipulations in a timely and proactive manner.