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On October 15, India’s capital market regulator, the Securities and Exchange Board of India (SEBI), announced an increase in position limits for trading members in index futures and options (F&O) contracts.
According to SEBI, the new limits for trading members, which combine client and proprietary trades, are now set at ₹7,500 crore or 15% of the total open interest (OI) in the market—whichever amount is higher. Previously, the limit was ₹500 crore or 15% of the total OI.
In a release, SEBI explained that the Master Circular on Stock Exchanges and Clearing Corporations, effective from October 16, 2023, specifies this overall position limit at the trading member (TM) level for both proprietary and client trades. The limit applies separately to all open positions in futures and options for a specific underlying index.
SEBI also highlighted that the open interest for market participants changes throughout the day. To provide more clarity, they will monitor positions in the equity derivatives segment (including index and stocks) based on the total open interest from the previous trading day.
If there is a drop in market open interest compared to the previous day, market participants may exceed the set limits without penalty, as long as their positions do not change during the day.
The new position limits take effect immediately, while the monitoring rules will start on April 1, 2025.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
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