The Securities and Exchange Board of India (SEBI) has made it mandatory for brokers to report client-level collateral . The regulator has released a framework for the segregation and monitoring of collateral in order to prevent misuse by trading members. It has also put in place a reporting mechanism that will involve disaggregated information, with break ups on the basis of segment and asset type, of each client collateral. This information will have to be reported to exchanges and clearing corporations on a daily basis. Exchanges and clearing corporations will have to make available web portals to clients to view disaggregated collateral reporting.
There will be no change in the procedures pertaining to placing of securities as collateral through the margin pledge or re-pledge mechanism in the depository system. The regulations relating to the reporting mechanism, and collateral deposit and allocation will come into effect from 1st October, 2021, while the other provisions will come into effect from 1st December, 2021.