According to the original diktat issued by Sebi last month, brokers had to increase their cash component of additional capital and margin to 50 per cent by March-end. "We have decided to extend the time," Sebi chairman DR Mehta told reporters here today, explaining that the brokers had asked for more time in view of their other obligations such as advance tax.

In another major move today, Sebi has also decided to roll back a number of additional volatility margins (AVM) imposed during the year. The AVM of 5 per cent imposed on the top 10scrips last month have been withdrawn. "Some of the scrips," said Mehta, "are still quite active, but we have left it to the discretion of the stock exchanges to impose margins according to the volatility."

The increase in daily margins and carry forward margins by 5 per cent - applicable across all scrips - also stands withdrawn. In addition, the 10 per cent reduction in gross exposure limits has been removed and have been restored to their former levels, Mehta said.

The five major stock exchanges had been directed by Sebi in February to take incremental additional capital and margins from the top 25 brokers in the forms of cash - this stands withdrawn with the expiry of the four-week period for which this requirement was valid. While BSE, NSE and Delhi Stock Exchange have already withdrawn it, Calcutta and Ahmedabad exchanges are in the process of doing so.

Elaborating on the removal of the margins and other risk-containment steps, Mehta said the measures were introduced at a time when the market wasdisplaying undue volatility and it was felt necessary to maintain the integrity of the market. He cited the example of March 9, when the market deviated by nearly 400 points. The total exposure of four major exchanges on that day was Rs 17,318 crore and the total amount collected in margins was Rs 7,218 crore - accounting for 42 per cent of the marginable exposure. In January, the average collection in a day was Rs 6,500 crore.

While the safety of the market remained unquestioned, Mehta said that the exchanges had pleaded a downtrend in their business while the brokers were also objecting to the plethora of margins that were in force.

At the moment, exchanges have been left to levy extra margins on scrips at their discretion - but this does not mean that Sebi will not see the need to intervene in margin impositions in the future.

The deferment of the date by which brokers had to pay 50 per cent adidtional capital and margin in cash had to be done in view of the liquidity constraints faced by brokers inthe current financial year - "but the basic objective of increasing the component remains," Mehta said adding this would add to the safety of the market.

Meanwhile, the working group set up by Sebi has the mandate to review he entire risk-managment system, comprising the margining system, exposure norms, circuit filter, capital adequacy and also to study risk containmnet measures in cash markets in the developed and emerging markets. As announed earlier by Mehta it will also rationalise and simplify the current risk-management system for the account period settlement, while it would recommend risk-containmtnet measures for securities traded in the rolling settlement.

The 17-member group, which has Sebi executive director Pratip Kar as the convenor, includes LK Singhvi and MD Patel both EDs in Sebi, Anand Rathi and AN Joshi from BSE, RH Patil and Ravi Narain from NSE, top functionaries from other exchanges, Nimesh Kampani from JM Morgan tanley, KR Bharat from CSFB and MM Kapur from UTI among others.