Sebi tightens F&O norms to keep out illiquid stocks
PrintListen to this Article
Market regulator Sebi has tightened the criteria for stocks to be traded in the futures and options segment by raising the minimum requirement of median quarter-sigma order size (MQSOS) - an indicator of market depth - for a stock to Rs 10 lakh from Rs 5 lakh. Sebi has also trebled the minimum market-wide position limit (MWPL) - which measures participation in a stock derivative - to Rs 300 crore for stocks to be introduced in the segment.
This will exclude several thinly-traded stock futures and restrict the entry of illiquid stocks into the derivatives segment.
Sebi also tightened the minimum conditions for a stock to continue trading in the derivatives segment. The regulator said a stock's MQSOS over the last six months should be more than Rs 5 lakh against Rs 2 lakh earlier. For stocks to remain in the derivatives segment, they will now need to retain a minimum MWPL of 200 crore compared with the existing Rs 60 crore.
"Many stock futures are either inactive or are being traded by select groups of traders. The new rules will remove such contracts from the market," said Siddarth Bhamre, head - equity derivatives at Angel Broking.
"Liquidity from such contracts will also shift to more liquid contracts and help improve overall price discovery in the market."
Sebi has also said that each stock derivative should have a minimum average monthly turnover of Rs 100 crore in the three trailing months to remain in the derivatives segment. (Economic Times)
Category : SEBI | Comments : 0 | Hits : 312
A financial influencer, also known as finfluencer, who was also involved in imparting training related to stock market trading has been asked to part with a little over ?12 crore, which it made unlawfully. The funds are to be credited or deposited by Ravindra Balu Bharti into an interest-bearing escrow account that has been set up in a nationalised bank especially for that purpose. The regulator stated in an order that the escrow account(s) would establish a lien in favour of SEBI and that th...
The Securities and Exchange Board of India (Sebi), the country's market regulator, has announced the launch of an optional same-day (T+0) settlement cycle for a select group of 25 stocks starting March 28, as per a circular published on its website last Thursday. This new initiative, referred to as the beta version, is set to coexist with the traditional next-day (T+1) settlement cycle, where trades are settled within 24 hours of execution. The T+0 settlement option will be available for ...
Capital markets regulator Sebi on Thursday slapped a fine of Rs 48 lakh on eight entities, including promoters of United Polyfab Gujarat Ltd (UPGL), for manipulating the share prices of the company. These entities have to pay the penalty jointly and severally within 45 days, as per an order. The order came after Sebi conducted an investigation of UPGL and trading by certain entities in the scrip of the company, to ascertain whether there was any violation of the provisions of the PFUTP (Pr...
Sebi alerts investors about the growing trend of unregistered entities falsely claiming Sebi registration and offering unrealistic returns. Investors are advised to verify the registration status and consider the inherent risks associated with high-return investments. The Securities and Exchange Board of India (Sebi) has issued a warning to investors, cautioning them against investing money with unregistered entities that promise assured or exceptionally high returns on investments. This advi...
Capital markets regulator Sebi on Thursday issued orders of action against 15 guest experts of the Zee Business channel for unlawful trading. The entities made unlawful gains to the tune of Rs. 7.41 crore from such trades and the profit was shared with guest experts as per prior understanding, Sebi noted. The market regulator also asked the guest experts to pay Rs.7.41 crore. The guest experts appeared on the Zee Business channel from 1 February 2022 and 31 December 2022. "The facts of t...
Comments