Position limits in derivatives tightened; exchanges must enforce market-wide caps, member limits and enhanced risk controls. SEBI revises eligibility criteria for stocks and indices for derivatives, requiring selection from high market-capitalisation and trading-value stocks, a minimum median quarter-sigma order size, and a minimum market-wide position limit; indices qualify only if a prescribed proportion of constituents are eligible and no large-weight ineligible stock exists. It prescribes enhanced risk containment: optional MTM timing with higher initial margins if deferred, higher margins/short-option charges for high impact-cost stocks, broadened acceptable liquid assets with daily valuation and VAR-based haircuts, and revised market-wide and trading-member position limits with mandatory exchange monitoring, real-time disclosure, ban/enforcement mechanics and penalties for violations.
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Position limits in derivatives tightened; exchanges must enforce market-wide caps, member limits and enhanced risk controls.
SEBI revises eligibility criteria for stocks and indices for derivatives, requiring selection from high market-capitalisation and trading-value stocks, a minimum median quarter-sigma order size, and a minimum market-wide position limit; indices qualify only if a prescribed proportion of constituents are eligible and no large-weight ineligible stock exists. It prescribes enhanced risk containment: optional MTM timing with higher initial margins if deferred, higher margins/short-option charges for high impact-cost stocks, broadened acceptable liquid assets with daily valuation and VAR-based haircuts, and revised market-wide and trading-member position limits with mandatory exchange monitoring, real-time disclosure, ban/enforcement mechanics and penalties for violations.
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