Sebi's New Framework Monitors Intraday Positions to Curb Risk

The Securities and Exchange Board of India (Sebi) announced a new framework to regulate intraday positions in equity index derivatives. The initiative is designed to mitigate risks from substantial exposures, capping net intraday positions at Rs 5,000 crore and maintaining gross limits at Rs 10,000 crore across entities.

The Securities and Exchange Board of India (Sebi) has put forward a fresh framework aimed at overseeing intraday positions within equity index derivatives. This strategic adjustment is intended to mitigate risks stemming from significant exposures.

Under the latest guidelines, the maximum net intraday position has been set at Rs 5,000 crore for each entity concerning index options, compared to the end-of-day threshold of Rs 1,500 crore. Sebi clarified that the gross intraday position is now limited to Rs 10,000 crore, which matches the prior end-of-day restrictions, applicable independently to both long and short positions.

Launching on October 1, the framework aims to support market-making actions consistently while ensuring controlled intraday position sizes, particularly on expiration days. This initiative seeks to balance trading facilitation with risk management, enhancing predictability and operational transparency in the derivatives sector.

(With inputs from agencies.)