Derivatives Rules
SEBI to roll out new F&O norms in staggered manner from July
This story was originally published at 23:14 IST on 29 May 2025
Register to read our real-time news.Informist, Thursday, May 29, 2025
MUMBAI – The Securities and Exchange Board of India has finalised a new set of measures for derivatives on open interest, position limits on index futures and options, and stocks, among others. These rules were floated earlier by SEBI in a consultation paper in February. The market regulator has now issued a circular.
The new regulations will begin to come into effect from July. The position limits for index futures and options will come into effect between July and December. The new definition of market-wide position limit, individual's entity-level position limits on single stocks, and position creation of single stocks during ban period will be effective from Oct. 1. Intraday monitoring of position limits and eligibility criteria for derivatives on non-benchmark indices will be effective from Nov. 3.
The regulator has changed the calculation of open interest to a delta-based approach, against the earlier way of calculating it on notional terms. "Open Interest (OI) of the participants in derivatives shall be measured at a portfolio level by computing the net Delta adjusted open positions across futures and options for an underlying at a given point in time," the circular said. The delta-based approach will help in mitigating the risk in index derivatives and reduce the number of stocks pushed into the ban period, SEBI had said in February.
The regulator also confirmed the changes to market-wide position limit, which were also put forward in February. The market-wide position limit will be lower than 15% of the free float or 65 times the average daily delivery value across clearing corporations. The market-wide position limit's floor cap is at 10% of free float.
SEBI also gave direction on position creation for single stocks during the ban period. "...any trading done by entities in the derivatives contracts of a scrip, subsequent to its entry in the ban period, should result in reduction of FutEq OI (future equivalent open interest) on end of day basis," the circular said.
The regulator has also restricted end-of-day net delta-based open interest limit for index options at INR 15 billion and gross delta-based open interest at INR 100 billion. SEBI has also defined position limits for various categories of foreign portfolio investors. The position limit was capped at INR 5 billion for the FPI categories I, II, and III on index futures.
It also confirmed requirements suggested for introducing any derivatives on non-benchmark indices. A non-benchmark index needs to have a minimum of 14 constituents before creating any derivatives, SEBI said. Further, the top constituent's weightage should be less than 20% in the non-benchmark index and the combined weightage of the top three constituents should be lower than 45%. End
Reported by Anshul Choudhary
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
