It is to be noted that the HSE maintained the trade turnover of over Rs 10 crore per day, prior to the series of margins and restrictions imposed by the Sebi to regulate and control the short sales. According to a senior HSE official all these margins will provide safety net to the small investor and help the authorities to bring down the incidence of default of the members. But the broking community argues that more and more restrictions on the trading would cripple the marketresulting in a liquidity crunch.

As per the notice issued by HSE last week, the concentration margin of 10 per cent will be levied on each member based on a slab system specified by the SEBI: first, if a member's net outstanding position on any one security is more than 40 per cent of the total outstanding position of all scrips; second, if the concentration in any two scrips together is more than 60 per cent; third, if the concentration in any three securities together is more than 80 per cent. The concentration margin is in addition to the 10 per cent margin already being imposed by the exchange on the net sale position in each scrip and the mark-to-market margin, the HSE clarified. However, the individual scrip margins have henceforth been lifted.

According to HSE VP Rajender Naniwadekar, turnovers on regional exchanges will fall due to these special margins. Almost all the brokers attached to the regional bourses usually concentrate on one or two scrips only, and they would be the most affected by thenew margin. The SEBI might have given some relief to the regional exchanges while imposing the additional concentration margin, Naniwadekar said. Though 800 odd companies are listed on the HSE, only four or five of them account for over 80 per cent of the total trade turnover. This scenario would change with the imposition of the concentration margins, Naniwadekar felt.