'Removal' Of 1,010 Stocks From Margin Trading Facility? NSE, BSE Clarify

The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), on Friday, refuted recent media reports claiming that 1,010 stocks have been removed from the list of eligible collateral for the Margin Trading Facility (MTF). 

Both exchanges clarified that no such circular has been issued and that the list of securities eligible for MTF has not significantly changed.

MTR Stocks List : Details

Under the current regulatory framework, trading members (TMs) offer MTF to their clients for stocks and exchange-traded funds (ETFs) included in the Group I list of securities issued by Clearing Corporations. 

This list, which is updated monthly, is based on objective criteria such as impact cost and is publicly available on the exchanges' websites. Approximately 2,000 securities are currently on the Group I list.

There has been no reduction in the number of securities eligible for MTF - the bourses said.

"Further, acceptance of collaterals by Clearing Corporation is based on a Risk-based objective approach to manage the efficiency of risk management and clearing and settlement. There is no scrip-specific discrimination that is exercised while updating the list of acceptable collaterals periodically," the release noted.

What Is MTR:

Margin Trading Facility (MTF) is a product approved by exchanges that allows you to buy stocks by paying only part of the total value. The broker funds the remaining amount and charges interest on this loan. It's important to note that the stocks must be verified per SEBI guidelines to purchase under MTF. While this leverage can lead to higher returns, it also increases the risk of significant losses if the share price falls.