New Delhi: Capital markets regulator, the Securities and Exchange Board of India (SEBI), is likely to ease the proposed curbs on trading in index options, It is likely to introduce a much higher threshold for net and gross position limits, an NDTV Profit report said on Sunday, citing people aware on the matter.
SEBI is likely “leaning towards allowing a net end of the day limit of Rs 1,500 crore and a gross limit of Rs 10,000 crore (each side) for Index Options”. “As per the previous proposal of the regulator, the net end of the day limit was Rs 500 crore only with a gross limit of Rs 1,500 crore,” the report noted.
Intra-day trading in index options is likely to be exempt from any cap. Instead, a robust surveillance protocol will be implemented where exchanges, in coordination with SEBI, will monitor intraday positions up to four times a day.
According to the report, if a trader’s exposure breaches certain thresholds, the regulator will investigate for possible concentration or manipulation. The regulator is also moving towards a delta-based open interest metric instead of the traditional notional method.
This approach accounts for the actual economic exposure of options trades rather than their notional size, which can be misleading. Last week, SEBI introduced stricter rules to improve governance at key market infrastructure institutions (MIIs) such as stock exchanges, clearing corporations, and depositories.
In a move aimed at preventing conflicts of interest and ensuring market integrity, the SEBI has made it mandatory for certain directors to observe a cooling-off period before joining a competing institution. “Provided that the non-independent director on the governing board of the depository may be appointed in a recognised stock exchange or a recognised clearing corporation or another depository with the prior approval of the Board, only after a cooling-off period as may be specified by the governing board of such depository,” it said.