Composition of Capital and Margins

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..... licy/Cir-19/99 dated July 02, 1999 specifies the additional capital required to be deposited in the form of cash, fixed deposit receipts (FDRs), bank guarantees and securities. Presently the cash component of additional capital and margins is specified as 30%. The issue of composition of additional capital and margins has been discussed by the Advisory Committee on Derivatives and Market Risk Mana .....

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..... component may be in the form of cash or cash equivalents. Cash equivalents would be as follows. 1.5 Cash equivalent a. Cash equivalent shall include FDRs, bank guarantees (as specified below), Government securities and units of the schemes of liquid mutual funds or government securities mutual funds (by whatever name called which invest in government securities) b. The haircut for Government .....

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..... entioned above would include guarantees provided by the bank for itself or for others as well as debt or equity securities of the bank which have been deposited by members for additional capital or margins. Eligible Securities and its Valuation While Section 1 specifies the cash and non-cash component of additional capital and margin and clause 1.5 in particular specifies the securities includi .....

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..... the purpose of non-cash component of additional capital and margin subject to a haircut equivalent to the VaR of the unit's NAV plus any exit load charged by the mutual fund. The valuation of a & b above shall be done on a daily basis. Base Minimum Capital The eligible shares for the purpose of the securities portion of the base minimum capital shall only be those which are classified as Grou .....

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..... of the member brokers/clearing members of the Exchange and also to disseminate the same on the website for easy access to the investors; and communicate to SEBI, the status of the implementation of the provisions of this circular in Section II, item no. 13 of the Monthly Development Report for the month of June 2003. This circular is being issued in exercise of powers conferred by section 11 .....

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