The Securities and Exchange Board (SEBI) of India on Thursday this week has revised the cut-off time for generating the last Risk Parameter File (RPF) on a day for commodities section. RPF is a file released by the clearing corporations that will contain the parameters for calculating the margin requirements for the members i.e., brokers. Based on this file members are required to collect the margins from their clients whoever falls short of it. Basically, verification of upfront margin collection by members from their clients.
Until now the cut-off time for releasing the last RPF is 5 pm. Thus, commodity segment that trades till 9 pm (globally linked agri commodities like Crude Palm Oil, Cotton etc) and 11:30 pm (metals, energy etc) had a leeway to stay out of the new margin rules which fully came into effect September 1 this year. The time limitations in money transfer that was there earlier was also one of the reasons.
Since the Reserve Bank of India has now made available all electronic mode of transfers round the clock, the SEBI has announced that commodity segment will get additional RPF beyond 5 pm. Accordingly, two additional RPFs for commodities that are traded till 9 pm and three for those traded till 11:30/11:55 pm. So, if you are trading in commodities and think that after 5 pm you will not get margin call, beware, things will change from next month.
The revision in sending additional RPFs will come into effect from January 15, 2022.
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