SEBI tightens criteria for exit, entry of stocks in derivatives segment

Stock market regulator Securities and Exchange Board of India (SEBI) has updated the eligibility criteria for the entry and exit of stocks in the derivatives segment.

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Through a circular issued on August 30, SEBI announced significant changes to the rules governing the inclusion and removal of stocks in the F&O segment.

"To help develop the securities market while being mindful of these concerns, SEBI vide section 3.1.2 of Chapter 5 of Master Circular on Stock Exchanges and Clearing Corporations, dated October 16, 2023, has, inter-alia, laid down the eligibility criteria for entry/exit of stocks in derivatives segment," SEBI said.

F&O stands for Futures and Options, refers to financial derivatives that allow traders to speculate on the price movements of an asset without owning the asset itself.

In recent years, the need to revamp the methodology for selecting stocks eligible for Futures and Options (F&O) trading has been a subject of growing concern.