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Sebi plans a Rs 1500 crore intraday limit on expiry days for weekly options like Nifty and Sensex to curb large trading volumes, following action against Jane Street Group.
Sebi mulls to put intraday limit on weekly options expiry.
India market regulator Securities and Exchange Board of India (Sebi) is mulling putting an intraday limit of Rs 1500 crore on the expiry day of weekly options like Nifty and Sensex, according to a Mint report. It aims to stop outsized positions and large volumes in trading.
The Mint report stated that a committee has been set up to discuss this limit, saying surveillance measures like imposing a penalty on clients who routinely exceed the intraday limits were discussed.
The development comes after the regulator cracked down on US-based high-trading firm Jane Street Group for alleged manipulation of Bank Nifty and Nifty.
As of now there is no intraday limit, though clients should not cross a Rs 1500 crore end of the day on a net basis and Rs 10,000 crore on a gross level.
A broker familiar with the committee’s deliberations told Mint that while most clients follow end-of-day limits on non-expiry days, they tend to exceed these caps on expiry days, as contracts lapse by market close and the restriction becomes irrelevant. “The proposal may have been discussed to curb the frenzy typically seen on expiry days,” he noted.
In another news, Sebi on Monday proposed a phased approach to restructuring existing equity indices that are linked to derivatives contracts to prevent market manipulation.
According to Reuters report, the proposal seeks to restructure three indices of banking stocks – NSE’s Nifty Bank, BSE’s Bankex, and Nifty Financial Services.
The Securities and Exchange Board of India (SEBI) had suggested the indexes would need to have at least 14 stocks and top constituents’ weightage cannot be more than 20%. The total weightage of top three constituents cannot be more than 45%, the Reuters report added.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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