What is SEBI Risk Management System?
The primary focus of risk management by SEBI has been to address the market risks, operational risks and systemic risks. To this effect, SEBI has been continuously reviewing its policies and drafting risk management policies to mitigate these risks, thereby enhancing the level of investor protection and catalyzing market development. The key risk management measures initiated by SEBI include:- Categorization of securities into groups 1, 2 and 3 for imposition of margins based on their liquidity and volatility. VaR based margining system. Specification of mark to Market margins Specification of Intra-day trading limits and Gross Exposure Limits Real time monitoring of the Intra-day trading limits and Gross Exposure Limits by the Stock Exchanges Specification of time limits of payment of margins Collection of margins on upfront basis Index based market wide circuit breakers Automatic de-activation of trading terminals in case of breach of exposure limits VaR based margining system has be
