“However since 2010, volatility-wise, we have been a lot better in comparison with the US. Whereas the credit score is often given to extra native participation, it’s got extra to do with SEBI rules that lowered leverage,” Kamath stated.
There was a time when if US markets caught a chilly, we would catch a fever. However since 2010, volatility smart, we have been… https://t.co/8O7OGtNIOg
— Nithin Kamath (@Nithin0dha) 1657286508000
In a thread on Twitter, Kamath stated many of the Sebi rules have damage the revenues of brokers within the quick time period however led to lesser volatility. “This has considerably improved the chances of retail individuals doing nicely. A type of Nazdiki fayda dekhne se pehle, door ka nuksaan sochna chahiye issues.”
In August 2011, he stated Sebi imposed a penalty for non-collection of end-of-day margins (SPAN) in F&O. Till then, brokers may enable prospects to commerce with no matter margins, even in a single day.
“Aug 2014: Min 50% haircut for mortgage towards safety. Till then, promoters & HNIs may borrow as a lot as 100%. Unwinding of LAS positions when markets fell in 2008 created a snowball impact. 50% is now a excessive margin of security for NBFCs, sufficient to keep away from liquidation on dangerous days,” he stated.
In Might 2018, penalty was imposed for non-collection of publicity & different margins along with SPAN for end-of-day F&O positions and in Nov 2019, Sebi began a penalty for non-collection of end-of-day VAR+ELM margins for shares. Till then, brokers may probably fund the margins to purchase shares, he stated.
“July 2020: Peak margin penalty for permitting prospects any further intraday leverage above SPAN+Publicity or VAR+ELM,” stated Kamath, who runs India’s largest low cost broking platform.