Is it true that SEBI has put off the implementation of client level margin reporting by 3 months?

You are absolutely right. On 23 November, SEBI issued a post-market circular putting off the implementation of the framework for segregation and monitoring of collateral at client level from 01st December 2021 to 28th February 2022. That is a delay of 3 months in the implementation of the collateral segregation rule. Under the new framework, brokers will be required to report segment-wise and asset-wise break-up of each client’s collateral.

The trigger was the Karvy scam wherein the broker pledge client collaterals without their consent. This system is likely to protect clients from any misuse of their funds and collateral either by the TMs or even CMs. Effectively, Trading Members report segregated information on cash and collaterals at client level to clearing member. The CM will report such data on collaterals and cash of TM clients & proprietary collaterals of TMs to clearing corporations.

In addition, even the new system of 50% collateral for futures and options positions which was to be implemented from 01 December has been put off to 28 February. The postponement is likely to give a reprieve for brokers and for traders as the new norms were stringent with heavy penalties in place.