Nitin Kamath: Zerodha CEO Nitin Kamath says SEBI rules protect Indians when US market turns cold


New Delhi: Credit SEBI Regulations aimed at mitigating the impact of leveraged positions on the Indian stock market, zerodha CEO Nitin Kamato Said earlier today that when the US market turns cold, Dalal Street will get a fever.

“But since 2010, volatility-wise, we have been much better than the US. While credit is usually given to more local participation, it has more to do with SEBI regulations that reduce leverage, Kamath said.

Kamath said in a source on Twitter that while most of the SEBI regulations hurt brokers’ revenue in the short term, it has reduced volatility. “This has significantly improved the chances of retail participants to do well. One of them is that before looking at the near advantage, one should think of the distant loss.”

In August 2011, he stated that SEBI imposed penalty for non-collection of end-of-day margin (Duration) in F&O. Until then, brokers could allow clients to trade with any margin, even overnight.

“August 2014: Minimum 50% haircut for loans against collateral. Until then, promoters and HNIs could borrow up to 100%. The change in LAS status created a snowball effect in 2008 when the market crashed. 50% 50% now have a higher margin of safety NBFCEnough to avoid liquidation on bad days,” he said.

In May 2018, penalty was imposed for non-collection of margins other than SPAN for end-of-day F&O positions and in November 2019, SEBI imposed non-collection of end-of-day VaR + ELM. Started fine for collection. Margin for shares. Until then, brokers can potentially fund margin to buy stocks, he added.

“July 2020: Peak margin penalty for allowing any additional intraday leverage to clients above SPAN+exposure or VaR+ELM,” said Kamath, who runs India’s largest discount broking platform.





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