Stock Market New Rules: Now, not SEBI, but RBI has announced new rules related to the stock market – they will be implemented from April 1.

News Topical, Digital Desk : New RBI regulations will come into effect on April 1, 2026, completely changing the funding system for stockbrokers. 100% secured funding will be mandatory, bank guarantees will require a fixed collateral, a 40% haircut on equity will apply, and bank funding for prop trading will be prohibited. Continuous collateral monitoring and margin calls will also be mandatory. Let's understand through questions and answers how this will impact brokers and ordinary investors.

Question 1: What has the RBI changed?
Answer: The biggest change is that brokers will now be required to maintain 100% secured funding. Previously, a 50 rupee fixed deposit (FD) and an unsecured guarantee (such as a promoter guarantee) of 50 rupees could suffice for a bank guarantee of 100 rupees. This will no longer be acceptable. The full guarantee will need to be backed by solid security.

Question 2: What does the new rule on bank guarantees say?
Answer: If a bank guarantee is being provided in favor of an exchange or clearing corporation, at least 50% collateral must be provided. And 25% of that 50% must be in cash. The meaning is clear: brokers will have to block more cash or solid assets.

Question 3: What does the 40% haircut on equity collateral mean?
Answer: Suppose you pledged a share worth 100 rupees. The bank will now consider it to be worth only 60 rupees. That is, a 40% reduction. This will require brokers to provide more shares or higher-value collateral than before. 

Question 4: What will be the impact on prop trading? Answer: Banks will no longer provide funding for prop trading. Only a few exceptions, such as market making or limited debt warehousing, will be permitted. This means that brokers will not be able to use bank funds for their own trading activities. 

Question 5: What does "all exposures are capital market exposure" mean? Answer: Now, any funding banks provide to brokers will be considered capital market exposure. The overall limits for banks will apply. This may reduce their lending capacity and make them more cautious. 

Question 6: Why continuous collateral monitoring and margin calls? Answer: The value of collateral will now be continuously monitored. If there is a shortfall, a margin call will be issued immediately. This will reduce risk, but brokers will have to operate with greater discipline. 

Question 7: What will this impact on ordinary investors? Answer: Brokers' leverage will decrease. Bank guarantees may become more expensive. Pressure on smaller brokers may increase. Larger and stronger companies may benefit. The positive aspect is that the system will be more secure and risk-reduced. However, trading costs and margin rules may become stricter. For the average investor, these rules simply mean that the broking system will be more secure and disciplined, but some aspects may also become more expensive and stricter. Because brokers' leverage will decrease and they will have to block more funds, their costs may increase. This may impact brokerage charges, margin requirements, or trading conditions. Smaller brokers will face increased pressure, while larger companies with stronger balance sheets will remain more stable. 

Overall , the RBI's goal is to reduce risk in the system. However, this means greater capital blockage, lower leverage, and increased costs. Promoter guarantees alone will no longer be sufficient. In the future, the broking industry will move towards a more disciplined and stronger balance sheet.
 

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