On Oct. 15, IND SEBI revised rules re limits in equity derivatives.
IND SEBI announced revised position limits for trading members (hereafter, TMs).
Follows IND SEBI Oct. 2024 issued master circular for stock exchanges, see #188261.
Revision
Based on participants' feedback and discussions, position limits for TMs (cumulatively for client and proprietary trades) in index futures and options contracts may be set at the higher of INR 7.5k crore or 15% of the total open interest (OI) in the market.
Position limits will still apply separately for index futures as well as index options.
OI of participants, market is dynamic throughout the day; to provide clarity, positions in equity derivatives will be monitored based on previous day’s total market OI.
If market OI drops, participants may breach limits without changing their positions, but no penalties or unwinding will be required for such passive breaches.
Effectiveness
The provisions re revised position limits come into effect on Oct. 15, 2024; provisions re monitoring of OI and position limits will be effective from Apr. 1, 2025.
