SEBI enhances position limits for trading members in index F&O contracts

Markets regulator SEBI on Tuesday said the position limit for Trading Members (TMs) across client and proprietary trades in index futures and options will now be higher of ₹7,500 crore or 15 percent of total open interest (OI) in the market.

The position limits are separately applicable for index futures and index options, the Securities and Exchange Board of India (SEBI) said in a circular.

Before this, the overall position limit at the trading member level (proprietary and client) is higher of ₹500 crore or 15 percent of the total Open Interest (OI) in the market.

Noting that the open interest of both the participants and the market is dynamic and changing throughout the day, SEBI said that the positions of market participants in the equity derivatives segment will now be monitored based on the total open interest of the market at the end of the previous day's trade.

If market open interest (OI) drops the next day, participants may exceed their limits even if their positions remain unchanged. For such cases of passive breaches, market participants would not be penalised and not be required to unwind their positions.

The new position limits are effective immediately, and monitoring based on the previous day's OI will start from April 1, 2025.