Question:
Which entity typically enforces the collection and monitoring of margins in the Indian Stock Market?
Which entity typically enforces the collection and monitoring of margins in the Indian Stock Market?
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While SEBI writes the rules for margin requirements, the Clearing Corporation (NSCCL) enforces them by monitoring accounts and collecting margins daily.
Updated On: Jun 22, 2026
- RBI
- SEBI
- NSCCL/Clearing Corporation
- Ministry of Finance
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Verified By Collegedunia
The Correct Option is C
Solution and Explanation
Step 1: Explaining Margining as a Risk containment tool:
Margining is a primary risk management tool used to protect the market from member defaults. It requires trading and clearing members to maintain security deposits that cover potential market losses.
Step 2: Checking Regulatory vs. Operational Roles:
While SEBI sets the overarching regulatory policy for margin types (such as Initial Margin, Extreme Loss Margin, and MTM Margin), SEBI does not manage day-to-day margin collections.
Step 3: Identifying the Enforcing Entity:
The operational duty of calculating real-time mark-to-market (MTM) losses, monitoring margin balances, and collecting margin deposits from clearing members lies with the clearing house, i.e., NSCCL Clearing Corporation (C).
Margining is a primary risk management tool used to protect the market from member defaults. It requires trading and clearing members to maintain security deposits that cover potential market losses.
Step 2: Checking Regulatory vs. Operational Roles:
While SEBI sets the overarching regulatory policy for margin types (such as Initial Margin, Extreme Loss Margin, and MTM Margin), SEBI does not manage day-to-day margin collections.
Step 3: Identifying the Enforcing Entity:
The operational duty of calculating real-time mark-to-market (MTM) losses, monitoring margin balances, and collecting margin deposits from clearing members lies with the clearing house, i.e., NSCCL Clearing Corporation (C).
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