Share Market Update: On Wednesday, a rise was seen in the shares of companies to the capital market. These include shares like BSE, Motilal Oswal Financial Services, Groww and Angel One. On Wednesday, a rise of up to 8 percent was recorded in all these shares.

This increase is being seen because the Reserve Bank of India (RBI) has decided to postpone the implementation of new and more stringent liquidity rules for three months. This delay has provided some relief to brokers and companies providing margin trading facilities, as they were under pressure due to these new rules.

8% rise in shares

At the time of writing, BSE shares were trading up by more than 6 percent, Groww by 4 percent, Motilal Oswal Financial Services by 7 percent and Angel One by 6 percent.

RBI gave big relief

The Reserve Bank of India (RBI) has postponed the implementation of its new and more stringent liquidity rules till July 1, 2026. This means that brokers can continue to use the 50% margin-backed bank guarantee for the next three months, which will provide them some relief.

This relief is all the more important because the industry is already under pressure due to higher Securities Transaction Tax (STT), which has come into effect from today. Earlier, the new rules of MTF (Margin Trading Funding) were scheduled to come into effect from April 1, but now they have been postponed.

RBI had proposed rules in February

The Reserve Bank of India (RBI) first proposed these more stringent rules in February. Under these rules, banks will have to provide funding to capital market entities (such as brokers) only on a fully secured basis. Previously, some portion of such funding may have been partially unsecured; But, under the new rules this will no longer be allowed.

The rules governing margin trading funding (MTF) are even more stringent. It is mandatory to have 50% of the total required collateral in cash. Additionally, if shares are used as collateral, their value will be reduced by 40% (called a “haircut”); That is, only 60% of their value will be considered valid.

Estimated decline in BSE profits

Jefferies had earlier said that due to these new rules, BSE’s profits may decline by about 10%. The logic behind this is that traders who trade using their own capital (proprietary traders). They will have to keep more cash margin as collateral, which will increase their operational costs.

What did Jefferies say?

Brokerage firm Jefferies suggests that in the capital markets sector, Groww and BSE may benefit from the current market volatility. However, there may be some pressure on both the companies due to Securities Transaction Tax (STT) and strict regulations imposed by the Reserve Bank of India (RBI), but the overall impact on trading volumes is expected to be minor (about 10%).