The Securities and Exchange Board of India (SEBI) has raised the position limits for trading members (TMs) in index futures and options (F&O) contracts to Rs 7,500 crore or 15% of the total open interest (OI) in the market, whichever is higher. This is a significant increase from the previous limit of Rs 500 crore.
The new limits will apply to both client and proprietary trades, with SEBI making the announcement through a circular issued on October 15. The regulator stated, “The overall position limit at the Trading Member (TM) level (proprietary + client) is now higher of Rs 7,500 crore or 15% of the total OI in the market. This applies separately for all open positions in futures and options contracts for a particular underlying index.”
The decision came following feedback from market participants and discussions within the Secondary Market Advisory Committee under SEBI. Further, it said the changes in the monitoring mechanism of position limits shall be applicable from April 1, 2025.
Under the revised mechanism, SEBI shall compare participants’ positions with the total open interest at the end of the previous trading day. If, on any day, the market OI is lower than the previous day, in the case of unchanged positions, participants will not be penalized or required to unwind their positions on passive breaches of position limits.
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Source: Moneycontrol
News Desk
