SEBI Eases Trading Norms For Equity Derivatives Contract

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sebiWith an aim to simplify the trading requirements, Securities and Exchange Board of India (SEBI) today relaxed the combined futures & options position limit of stock brokers, Foreign Portfolio Investors (FPI) and mutual funds in equity derivatives to 20% of the applicable Market Wide Position Limit (MWPL).  The decision was taken after consulting with SEBI’s Secondary Market Advisory Committee. 

Currently, stocks having market-wise position limit of Rs 500 crore or more, the combined Future & Option position limit is 20% of the MWPL or Rs 300 crore, whichever is lower and within which stock futures position cannot exceed 10% of applicable MWPL or Rs 150 crores, whichever is lower. 

In case of stocks having market-wise position limit less than Rs. 500 cr, the combined futures & options position limit is 20% of the MWPL and futures position cannot exceed 20% of the MWPL or Rs. 50 crore whichever is lower. 

Market Wide Position Limit (MWPL) is one of the key parameters in stock analysis that trade in the derivative segment. Now, SEBI has eliminated this clauses so as to ease trading requirements of stock brokers/Foreign Portfolio Investors Category I & II, mutual funds in equity derivatives segment. The combined futures & options position limit shall be 20% of the applicable MWPL for such categories, SEBI said in a circular.

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