TaxTMI 
TaxTMI 
Review of eligibility criteria for entry/exit of stocks in derivatives segment.
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....promised investor protection. 1.2. 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. 1.3. Given the need to ensure that only high quality stocks with sufficient market depth are allowed to trade in derivatives segment and considering the growth witnessed in market parameters since the last review conducted in 2018, the eligibility criteria for entry/exit of stocks in derivatives segment has been revised as under. 2. Entry Norms for stocks in derivatives segment 2.1. The stocks me....
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....ks which meet the eligibility criteria in the underlying cash market of any stock exchange would be permitted to trade in equity derivatives segment of all stock exchanges. The stock exchanges shall settle the derivative contracts at a price calculated by the clearing corporations based on volume weighted average price (VWAP) from the cash segment across all exchanges. 2.3. In addition, other aspects, such as, any surveillance concerns, ongoing investigations, or other administrative considerations shall be taken into account by SEBI, while considering a stock for introduction into derivatives segment. 3. Exit norms based on performance in underlying cash market 3.1. If a stock in derivatives segment fails to meet any of the above ....
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.... for a period of one year from its last trading day in the derivatives segment. 4. Exit norms based on introduction of a Product Success Framework (PSF) for stock derivatives 4.1. On similar lines as the extant PSF for index derivatives, it has been decided to introduce additional exit criteria for stocks from the derivatives segment, by introducing PSF for single stock derivatives also. The criteria for the said PSF framework is as follows. 4.1.1. At least 15% of trading members active in all stock derivatives (trading member who has traded during the month) or 200 trading members, whichever is lower, shall have traded in any derivative contract on the stock being reviewed on an average on monthly basis during the review period, ....
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....ves segment due to PSF, it shall not be considered for re-inclusion for a period of one year from its last trading day in the derivatives segment. 4.6. The PSF review cycle shall be aligned with the review of entry and exit norms based on performance in underlying cash market i.e. all the above criteria for PSF shall be calculated on the 15th of each month, on a rolling basis, considering the data for previous six months. 4.7. A stock will exit from derivatives segment if it fails to meet the PSF criteria on all the exchanges. If a stock is meeting the PSF criteria on any exchange, it will continue to be eligible for derivatives segment on all exchanges. 5. Illustrations on exit timelines of stocks under various scenarios are place....
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....ation period Exit timeline September 02, 2024 6 months for conducting a review from date of introduction and aligned with the review cycle Review conducted on May XX 2025 (past 6 months rolling data for the period ending 15-Mar 2025,15-Apr-2025 and 15-May-2025) September 30, 2024 6 months for conducting a review from date of introduction and aligned with the review cycle Review conducted on Jun XX 2025 (past 6 months rolling data for the period ending 15-Apr-2025,15-May-2025 and 15-Jun-2025) 6. All other provisions mentioned in Master Circular No. SEBI/HO/MRD2/PoD-2/CIR/P/2023/171 dated October 16, 2023, shall continue to be applicable 7. The Stock exchanges are directed to: 7.1.....