Circular No. SEBI/HO/MRD/TPD/CIR/P/2025/ 122, Dated: 01.09.2025
1. SEBI Notifies Framework for Intraday Position Limits
The Securities and Exchange Board of India (SEBI) has officially notified the Framework for Intraday Position Limits Monitoring in Equity Index Derivatives. The move aims to strengthen risk management in the derivatives market and provide a more robust mechanism for monitoring intraday exposures of market participants. By introducing this framework, SEBI seeks to ensure orderly functioning of markets and mitigate systemic risks that may arise from excessive intraday exposures.
2. Entity-Level Monitoring for Index Options
A key feature of the framework is the entity-level intraday monitoring system, specifically designed for index options. This approach ensures that market participants, including liquidity providers and market makers, operate within defined risk boundaries. The monitoring at the entity level will provide better oversight of exposures and prevent concentration of risks, thereby supporting market stability while allowing active participation.
3. Net and Gross Position Limits Defined
Under the new framework, SEBI has laid down clear quantitative thresholds. The Intraday Net Position Limit has been fixed at ₹5,000 crore, while the Intraday Gross Position Limit has been capped at ₹10,000 crore. These limits are expected to provide a balance between enabling adequate trading flexibility and safeguarding the market against potential volatility triggered by oversized positions.
4. Enhancing Market Integrity and Stability
The introduction of this framework reflects SEBI’s continuous efforts to strengthen risk control measures in the derivatives segment. By capping intraday positions and ensuring real-time monitoring, the framework will help in reducing the risk of defaults and maintain investor confidence. At the same time, SEBI has provided enough flexibility for genuine market activity, ensuring liquidity and fair participation in the equity derivatives market.
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