The Securities and Change Board of India on Tuesday has launched a spread of latest measures beneath its F&O framework to strengthen the fairness index derivatives market, specializing in investor safety and market stability. These measures stem from suggestions made by SEBI’s Knowledgeable Working Group on derivatives and the Secondary Market Advisory Committee.
One of many adjustments included the necessary upfront assortment of choice premiums from patrons, which can forestall undue intraday leverage. “It has been determined to mandate assortment of choices premium upfront from choice patrons by the buying and selling member or clearing member,” The markets regulator stated in a round. This requirement will take impact from February 2025.
Moreover, SEBI will take away calendar unfold therapy on the expiry day of contracts, aiming to minimise foundation danger on these high-volume buying and selling days. This measure can even be efficient from February 2025.
The markets regulator’s announcement got here after its Monday board assembly, the place it was anticipated to approve the suggestions of the professional working committee and Secondary Market Advisory Committee aimed toward tightening laws for retail particular person spinoff merchants. The F&O Framework was not included within the Monday assembly.
SEBI in its Tuesday’s round had highlighted that elevated retail participation, short-tenure index choices contracts, and heightened speculative buying and selling volumes on expiry days have impacted the market.
