Sebi raises F&O position limits to above Rs 7,500 crore or 15% of total OI

Oct 15, 2024

Capital market regulator Securities and Exchange Board of India (Sebi) has raised the position limits for trading members in index Futures & Options contracts to 15% of the total open interest (OI) in the market or above Rs 7,500 crore.

The position limits are governed under Sebi's Master Circular on Stock Exchanges and Clearing Corporations (SECC), dated October 16, 2023, which specifies the overall position limit at the Trading member (TM) level (proprietary + client) to be higher of Rs 500 crores or 15% of the total Open Interest (OI) in market.

The position limits for trading members will be cumulatively for client and proprietary trades and the position limits will be applicable for index futures and index options separately as per the current practice, a Sebi circular released on Tuesday, said.

While the open interest of both the participants and the market is dynamic and changing throughout the day, equity derivatives segment i.e. index and stocks will also be monitored based on total open interest of the market at the end of previous day’s trade, the Sebi circular further stated.

In order to provide better clarity to the market participants in terms of their position limits, Sebi has also decided that in the event of a drop in market OI compared to the previous day’s market OI, market participants could breach the specified position limits even if their positions have remained unchanged throughout the day.

"For such cases of passive breaches, market participants would not be penalised and not be required to unwind their positions," the circular said.

The provisions related to the raise in the position limits of trading members have come into effect. While the provisions related to providing clarity to market participants will come into effect from April 1, 2025.

[The Economic Times]