The government has introduced a key amendment requiring brokers to fund only through 100% secured means from now on. Earlier, Rs 100 bank guarantees could be partly unsecured, but the new rules remove this option. Now, all guarantees must be fully backed, except for limited cases like intra-day settlement. Bank guarantees issued to exchanges or clearing houses must have at least 50% collateral, with 25% of that in cash. Equity shares used as collateral will face a 40% minimum haircut, tightening how banks value these assets. The amendment also stops banks from funding proprietary trading except for market making and certain debt warehousing. All exposures will now count as capital market exposure, affecting lending limits and possibly decreasing banks’ willingness to fund these ventures. There will be continuous monitoring of collateral and margin calls if collateral falls short. Facility agreements must formally include margin call clauses. Experts say these rules will reduce leverage in the system and increase capital blockage for brokers. Costs for bank guarantees will likely rise. Promoter guarantees alone will no longer be enough to support funding. This move aims to make the market safer by ensuring brokers back their funding fully and by tightening rules around guarantees and trading funding.