Thursday October 3 2024
News Source: Global Exchanges
Focus: Derivative Market Segment
Type: General
Country: India
On 1st October 2024, the Securities and Exchange Board of India (SEBI) issued a circular on measures to strengthen equity index Derivatives framework for Increased Investor Protection and Market Stability.
To review the existing regulatory measures for investor protection while ensuring the orderly development and strengthening of equity derivatives market, as well as to identify measures to assist stock exchanges in carrying out their core functions, SEBI formed an Expert Working Group (EWG) on derivatives, to suggest measures for investor protection and market stability.
Based on the measures recommended by the EWG and subsequent deliberations in the Secondary Market Advisory Committee (SMAC) of SEBI, a consultation paper was issued by SEBI on July 30, 2024, in the matter. The comments received were examined by SEBI, and the matter was further discussed with Stock Exchanges and Clearing Corporations, after which it has been decided to put in place the following measures and effective dates to strengthen the equity index derivatives framework.
| Sr. No | Measure | Effective From |
| 1. | Upfront collection of Option Premium from buyers | February 01, 2025 |
| 2. | Removal of Calendar spread treatment on the Expiry Day | February 01, 2025 |
| 3. | Intraday monitoring of position limits | April 01, 2025 |
| 4. | Contract size for index derivatives | November 20, 2024 |
| 5. | Rationalization of Weekly Index derivatives products | November 20, 2024 |
| 6. | Increase in tail risk coverage on the day of options expiry | November 20, 2024 |
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