There was news that the National Stock Exchange (NSE) has recently issued a rule under which the list of shares that can be used for margin funding has been reduced considerably. Earlier 1730 shares were included in this list, which has now been reduced to 720. The shares that have been removed include well-known companies like Adani Power, Yes Bank, Suzlon, Bharat Dynamics and Paytm.

What happened now?  NSE, BSE have issued clarification on margin funding. NSE has said that the news of removal of 1010 shares from the MTF list is wrong. SEBI did not issue a circular to remove shares. No circular was issued to remove shares in October. Before we go, let us tell you what is margin trading facility (MTF). It is like a 'buy today, pay later' model. It allows common investors to buy shares of only a part of the total trade volume. The broker covers the rest of the investment, charging interest on the borrowed amount. For example, to buy 1,000 shares at a price of Rs 100, an investor will need Rs 1 lakh. With MTF, they have to pay only 30%, while the broker pays the remaining 70% on interest. Both traders and brokers get the benefit of margin trading. Traders can take loans to invest more money and try to make bigger profits, while brokers earn interest on the loans given.