Monitoring of position limits for equity derivative segment
Summary
SEBI has increased the overall position limit for Trading Members in the equity derivative segment to the higher of INR 7,500 crore or 15% of total Open Interest. Monitoring of these limits will now be based on the market's total open interest at the end of the previous day's trade rather than intraday fluctuations. The revised monetary limits take immediate effect, while the new monitoring methodology becomes effective from April 1, 2025.
Text
The position limits for TMs, cumulatively for client and proprietary trades, in index Futures and Options contracts may be set at higher of INR 7,500 crore or 15% of the total OI in the market.
As per the extant practice, the position limits will be applicable for index futures and index options separately.
In conformity with the extant practice in currency derivatives segment, positions of market participants in the equity derivatives segment (index and stocks) shall also be monitored based on total open interest of the market at the end of previous day’s trade.
In case of a drop in market OI compared to the previous day’s market OI, market participants may 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 provisions mentioned at para 2 above, would come into effect immediately.
The provisions mentioned at para 3 above, would come into effect from April 01, 2025.
Make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision, as may be necessary/applicable.
Bring the provisions of this circular to the notice of the market participants (including TMs) and to disseminate the same on their website.
Source: SecMarx — Monitoring of position limits for equity derivative segment. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.