Mumbai, May 26 -- India's market regulator is considering lowering margin requirements for certain margin-funded stock trades in a move that could reduce capital locked up in such trades for brokers and investors.

The proposal, discussed and approved earlier this month by the Securities and Exchange Board of India's (Sebi) secondary market advisory committee (SMAC), relates to margin trading facility (MTF) positions for futures and options (F&O)-eligible stocks where clients use cash for pay-in, according to two people familiar with the discussions.

This will align margin requirements with those applicable to MTF trades in other F&O eligible stocks, according to one of the people cited above, who spoke on condition of anonymity. "Howeve...