The October 15 circular announced a change in the position limits monitoring mechanism, effective April 1, 2025.
The market regulator has increased the position limits for trading members (TMs) in index futures and options contracts to Rs 7,500 crore or 15% of the total open interest (OI) in the market, whichever is higher. Previously, the limit was Rs 500 crore or 15% of the total OI.
The Securities and Exchange Board of India (Sebi) announced this in a circular on October 15.
The circular states that the overall position limit for trading members will be the higher of Rs 500 crore. Alternatively, it can be 15% of the total open interest.This applies to both proprietary and client trades. This limit applies to all open positions in futures and options for a specific index.
The circular states that position limits for trading members (TMs) in index futures and options will be set higher. The limit will be either Rs 7,500 crore or 15% of the total open interest (OI) in the market. This decision follows feedback from market participants and discussions in the Secondary Market Advisory Committee (SMAC). These limits will apply separately to index futures and options.
Additionally, authorities will update the monitoring mechanism for these position limits, effective April 1, 2025.
The circular also stated that, like in the currency derivatives segment, authorities will monitor positions in equity derivatives, including both index and stocks. They will do this based on the total open interest from the previous day’s trading.
It stated that if the market’s open interest falls from the previous day, market participants might exceed the specified position limits. This can happen even if their positions remain unchanged throughout the day.
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