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Sebi has truly launched a group of 6 procedures to reinforce the fairness index by-products, moreover known as F&O construction
SEBI Bhavan at BKC Bandra in Mumbai (PTI/ File Photo)
The Securities and Exchange Board of India (SEBI) has truly really useful 6 important procedures to suppress excessive supposition within the futures & & options (F&O) sector, readied to work on November 21, 2024. Originally ready to be executed on November 20, 2024, the brand-new laws will definitely at the moment enter strain on November 21 due to a buying and selling trip.
Based on responses from market people and after an analysis by a specialist functioning crew and the extra market consultatory board, Sebi has truly modified the minimal settlement price to Rs 15 lakh from the earlier number of Rs 5– 10 lakh. This change will definitely have an effect on the Lot Size of freshly introduced F&O agreements, which will definitely at the moment drop inside the Rs 15– 20 lakh array.
Sebi’s October 1, 2024, spherical defines that acquired agreements will definitely have a minimal price of Rs 15 lakh on the time of intro, with the Lot Size repaired to ensure that the settlement price stays in between Rs 15 lakh to Rs 20 lakh all through testimonials.
Key Changes in Derivatives Trading:
1. Reduction of Weekly Expiries
Starting right this moment, Sebi will definitely decrease common expirations for index acquired agreements to at least one per benchmark index per trade. This intends to suppress speculative buying and selling and limitation risks linked to uncovered or nude various advertising and marketing.
2. Increased Contract Sizes
The minimal settlement price for by-products will definitely improve from Rs 5-10 lakh to Rs 15 lakh, urging financiers to assume higher levels of risk. Going forward, the settlement price will definitely be tailored to array in between Rs 15 lakh and Rs 20 lakh.
3. Higher Margin Requirements
To protect financiers from extreme market modifications, Sebi will definitely implement an added extreme loss margin (ELM) of two% on all open temporary options at expiration. This will definitely enhance tail-risk safety, notably all through high-volume buying and selling durations.
4. Upfront Collection of Premiums
Effective from February 1, 2025, brokers will definitely be known as for to build up various prices forward of time. This adjustment intends to dissuade excessive intraday benefit from and ensures financiers have sufficient safety to cowl their placements.
5. Removal of Calendar Spread Benefits
The strategy of schedule spreads– balancing out placements all through numerous expirations– will definitely be gotten rid of for agreements ending on the very same day. This motion is deliberate to reduce speculative buying and selling on expiration days.
6. Intraday Monitoring of Position Limits
Starting April 1, 2025, inventory market will definitely begin conserving observe of placement restrictions for fairness index by-products all through the buying and selling day. This will definitely help defend in opposition to buyers from going past placement restrictions undetected.
Meanwhile, residential inventory trade are shut right this moment in statement of the Maharashtra Assembly political elections.
News group” markets Lot Size Hiked, Only 1 Weekly Expiry, Upfront Margin: Sebi’s New F&O Rules Kick In From Thursday
