SEBI/HO/MRD/TPD/CIR/P/2025/ 122

rules · 1992 · State unknown

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Parent: THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 (7c4c1f5343adab106c3a94cafc08a5ecf5957ae7)

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CIRCULAR SEBI/HO/MRD/TPD/CIR/P/2025/ 122 September 01, 2025 To, All Stock Exchanges , All Clearing Corporations , All Depositories , Dear Sir/ Madam, Sub: Framework for Intraday Position Limits Monitoring for Equity Index Derivatives SEBI consultation paper dated February 24, 2025 on 'Enhancing Trading Convenience and Strengthening Risk Monitoring in Equity Derivatives', proposed the following Future Equivalent (FutEq) or delta equivalent positions limits for index options: On the basis of feedback received from market participants and subsequent deliberations in Secondary Market Advisory Committee (SMAC) of SEBI as well as with Market Infrastructure Institutions (MIIs), following was stipulated for position limits for index options (Para 5.5 of SEBI circular SEBI/HO/MRD/TPD-1/P/CIR/2025/79 dated May 29, 2025): On the basis of observed instances of outsized intraday FutEq positions created by certain entities in index options on the day of contract expiry and the risks to market integrity thereof, discussions were held with Stock Exchanges to strengthen the intraday monitoring framework for index options. In view of the aforesaid discussions and after deliberations in SMAC , it is decided to implement the following entity level intraday monitoring framework for index options to ensure market stability, while facilitating participation by various market participants including liquidity providers / market makers: 4.1.Intraday Net position limit (FutEq basis) for each entity shall be ₹5,000 cr. (as against end of day limit of ₹1,500 cr). 4.2.Intraday Gross position limit (FutEq basis) for each entity shall be ₹10,000 cr. (i.e. separately both on long and short sides), same as the present end of day limit . 4.3.The aforesaid intraday limits shall continue to be monitored by

Rule TOC

4 · 1.Intraday Net position limit (FutEq basis) for each entity shall be ₹5,000 cr. (as against end of day limit of ₹1,500 cr).

4 · 2.Intraday Gross position limit (FutEq basis) for each entity shall be ₹10,000 cr. (i.e. separately both on long and short sides), same as the present end of day limit .

4 · 3.The aforesaid intraday limits shall continue to be monitored by Stock Exchanges through a minimum of four random snapshots during the trading day (including one snapshot between 14:45 hrs to 15:30 hrs i.e. around market closing time where heightened activity is geberally observed) .

4 · 4.Further, in order to monitor the intraday positions of entities, as mentioned aforesaid, the Stock Exchanges shall consider the underlying price at the time of taking positions snapshots.

4 · 5.Entities shall be allowed to take additional exposure against holding of securities or cash/cash equivalent, as applicable, in line with para 5.5.3 of SEBI circular dated May 29, 2025 .

4 · 6.For the entities breaching the aforesaid limits, Stock Exchanges shall examine trading patterns of such entities which would inter-alia include seeking rationale for such positions from the clients, examining trading in the constituents of the index by the entity and discussing such instances with SEBI in the surveillance meeting.

4 · 7.On the day of expiry of options contracts , the breaches of aforesaid position limits shall additionally attract penalty/additional surveillance deposit, as decided jointly by Stock Exchanges .

4 · 8.The aforesaid framework would facilitate market making activity on all trading days while putting a check on creation of outsized intraday position on the expiry day for orderly trading .

4 · 9.The aforesaid framework would also provide predictability, operational clarity, and a fair balance between ease of trading and risk management .

4 · 10. The aforesaid framework shall be restricted to index options only.

10 · This Circular is available on SEBI website at www.sebi.gov.in under the categories "Legal Framework" and "Circulars".