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Mumbai, July 28 The capital market regulator, SEBI, on Monday said that for cash market “buy” transactions, the margins collectively should not exceed their purchase value.

These margins include VaR (Value-at-Risk) margins, extreme loss margins and mark-to-market losses together.

This rule will come into effect from August 17.

In the case of a “sale” transaction in cash market, the practice of VaR margins and extreme loss margins together not exceeding the sale value of the transaction will continue. Also, mark-to-market losses will be levied, a SEBI circular said. Further, the regulator directed exchanges and the market participants to introduce software changes, test the software and remove any glitches in its operation before the rule takes effect to avoid any problems in the live environment.

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