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Introducing the “In Favour Of” filter in Case Laws.
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of <h1>FIIs Allowed to Trade Derivatives with Position Limits Under Regulatory Rules for Transparency and Risk Control</h1> Foreign Institutional Investors (FIIs) are permitted to trade in all exchange-traded derivative contracts subject to specific position limits set by regulatory authorities. At the FII level, limits are 15% of open interest or Rs. 100 crores for index derivatives, and 7.5% or Rs. 50 crores for stock derivatives per exchange. Sub-accounts have limits based on free float market capitalization or open interest percentages. FIIs must notify clearing members and custodians, use unique codes for identification, confirm positions daily, and report breaches. Exchanges and clearing houses monitor compliance and restrict new positions if limits are exceeded, allowing only offsetting trades to reduce exposure. Position limits are calculated gross at the FII level and net at sub-account levels, with valuations based on open interest and closing prices. This framework ensures regulated FII participation in derivative markets with transparency and risk control.
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