No margin on new cash-segment trades up to the value of accepted early pay-in
TaxByKK · Compliance News · taxbykk.com22 Oct 2026
In short
SEBI has told clearing corporations not to collect margin from the trading or clearing member on a client's subsequent buy or sell positions in the cash segment, up to the value of an accepted early pay-in (EPI), when the client has a net sell obligation. The check will run in real time. The circular comes into force four months after 22 October 2026.
- Authority
- SEBI, Market Regulation Department
- Circular
- HO/(320)2026-MRD-POD2/I/24141/2026 dated 22 October 2026
- Type
- Circular
- Effective from
- Four months from 22 October 2026
- Law
- SEBI Act, 1992, section 11(1); SECC Regulations, regulation 51
- Applies to
- Stock exchanges, clearing corporations, depositories and stock brokers
What changed
| Item | Before | Now |
|---|---|---|
| Margin on a client's later positions after an accepted EPI | Collected from the TM/CM | Not collected, up to the available EPI value |
| Available EPI value | — | Lower of the EPI done and the value of securities sold |
If the client squares off the sale for which EPI was used, the EPI value is removed and any margin shortfall is blocked from the TM/CM's proprietary collateral. This does not apply to trade-for-trade (TFT) securities, which settle on a gross basis. The proposal came from the Broker ISF and SEBI's Risk Management Review Committee.
Who it applies to
- Investors who sell shares with early pay-in and trade again the same day
- Stock brokers and clearing members
- Clearing corporations and exchanges
What to do
- Brokers: update risk systems so a client can square off the EPI position or take new positions only if the required margins are available.
- Brokers: watch for exchange and clearing corporation circulars on bye-law and system changes.
- Investors: the benefit applies only when the EPI request is accepted by the clearing corporation.
Reference
SEBI circular HO/(320)2026-MRD-POD2/I/24141/2026, 22 October 2026, Margin Waiver on Subsequent Buy/Sell Transactions Post Early Pay-In (EPI) in Cash Segment.
Read the official PDF: SEBI circularWritten by TaxByKK from the official notification. Check the official text before you act on it.
Frequently asked questions
What is the new SEBI rule on margin after early pay-in?
Clearing corporations will not collect margin on a client's subsequent positions up to the value of accepted EPI, when the client has a net sell obligation.
How is the EPI value worked out?
It is the lower of the value of EPI done and the value of securities sold.
Does it apply to trade-for-trade securities?
The removal rule on square-off does not apply to TFT securities, which settle on a gross basis.
When does it start?
Four months from the date of the circular, 22 October 2026.