SEBI Eases Trading Norms For Equity Derivatives Contracts
The combined F&O position limit was raised to 20 percent of market wide position limit.
With an aim to ease trading requirements, markets regulator Securities and Exchange Board of India on Tuesday relaxed the combined futures and options position limit of stock brokers, foreign portfolio investors and mutual funds in equity derivatives to 20 per cent of the applicable Market Wide Position Limit.
The decision has been taken in consultation with SEBI's Secondary Market Advisory Committee.
Currently, stocks having market-wise position limit of Rs 500 crore or more, the combined F&O position limit is 20 percent of the MWPL or Rs 300 crore, whichever is lower and within which stock futures position cannot exceed 10 percent of applicable MWPL or Rs 150 crore, whichever is lower.
In case of stocks having market-wise position limit less than Rs 500 crore, the combined futures and options position limit is 20 percent of the MWPL and futures position cannot exceed 20 percent of the MWPL or Rs 50 crore whichever is lower.
Market Wide Position Limit is one of the key parameters in analysis of stocks that trade in the derivative segment.
Now, SEBI has removed this clauses in order to ease trading requirements of stock brokers/Foreign Portfolio Investors Category I and II, mutual funds in equity derivatives segment.
"The combined futures and options position limit shall be 20 per cent of the applicable Market Wide Position Limit" for such categories, SEBI said in a circular.