SEBI has proposed cutting the mandatory 20% upfront margin requirement for stock trades to free up locked capital. The regulatory pivot aims to boost domestic trading volumes and enhance .
20%
Current Margin Mandate
⏳ Time Machine
How today’s news fits into the bigger picture
2001
Ketan Parekh scam
Excessive broker leverage and unauthorized lending caused a market crash, leading to the ban of the traditional badla system.
2020
Peak margin phase-in begins
SEBI began implementing phased margin rules to mandate upfront collection, starting at 25% and eventually moving to 100% of peak requirements.
2021
100% upfront margins mandate
The final phase of the framework took effect, forcing day traders to provide full collateral on all transactions.
Today
SEBI releases a consultation paper proposing to cut the 20% upfront margin on stock trades.
What happens next?
A revised, relaxed margin framework is expected to go live by late 2026.
On Thursday, July 23, 2026, the Securities and Exchange Board of India (SEBI) proposed a significant cut to the 20% upfront margin requirement on stock trades. Since late 2021, traders have had to deposit 20% of their transaction value upfront, locking up billions in idle capital. The strict rule de-risked brokerages but also drove retail volumes down and pushed capital toward riskier index options. SEBI's new consultation paper seeks to relax these norms to boost domestic liquidity. This is a massive win for discount brokerages like Zerodha and Angel One, as increased capital rotation directly drives trading volumes and fee income.
💭 If you're wondering…
It is the safety deposit you must keep with your broker before you can place a buy or sell order for shares.
Did this story help?
Official sources
Knowledge Chain — tap a concept