Sebi May Tweak Index F&O Limit for FPIs and MFs

A Sebi study from 2021-22 to 2023-24 found individual traders lost an aggregate ₹1.8 tn, mostly in index options

- Ram Sahgal & Neha Joshi

The Securities and Exchange Board of India (Sebi) may revise the ₹500-crore exposure or open interest limit each in index futures and options imposed for institutional investors—foreign portfolio investors and mutual funds—after the covid outbreak in March 2020.

The markets regulator proposes to change the methodology for measuring open interest (OI), the value of outstanding buy-sell positions, among participants in the derivatives segment. The limit is over and above that set for institutions to hedge their portfolios.

Besides, Sebi plans to link the market-wide position limit (MWPL)—collective positions held by market participants—in single stock futures and options (F&O) to the average daily delivery volumes of the underlying stocks rather than to the notional volumes.