Market regulator SEBI has announced major changes in the regulation of futures and options. Rules regarding entry and exit have been tightened. Its purpose is to control stock manipulation.
Market regulator SEBI has issued a new circular regarding futures and options. The market regulator has tightened the rules regarding entry and exit so that stock manipulation can be curbed. Shares that do not meet the standards will get time to exit. SEBI has increased the market wide position limit by Rs 500 crore to Rs 1500 crore. On an average basis, the daily cash segment volume has been increased from Rs 10 crore to Rs 35 crore.
Apart from this, the median quarterly order sigma size has been increased from Rs 25 lakh to Rs 75 lakh. Exit conditions will be applicable if the half-yearly average volume based benchmark is not met for 3 consecutive months. New contracts will not be opened in exiting stocks but there will be an opportunity to close the existing ones.
SEBI’s revised guidelines will come into effect immediately. SEBI’s objective is to keep companies with high quality and sufficient market depth in this segment. The wide position limit has been increased to Rs 1500 crore. If this criteria is not met for three consecutive months, the company will be removed from the derivatives segment. Currently, a gestation period of 6 months has been given to the companies in this segment. Once the stock exits the F&O segment, it will not get re-entry for one year.
