Sebi eases intraday monitoring rules for index derivatives amid opposition

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The Securities and Exchange Board of India (Sebi) has eased the intraday monitoring rules — which are set to take effect from April 1 — for index derivatives amid industry pushback.

 

As per a circular issued on Friday, any breaches of existing limits will not attract penalties — for now — following concerns raised by industry stakeholders.

 

Starting next week, exchanges like the NSE and BSE will take at least four random snapshots of positions daily within predefined time windows. The move aims to enhance oversight of the derivatives market but has sparked debate among brokers and traders.

 

Industry bodies, including the Association of National Exchanges Members of India (ANMI), Brokers’ Forum (BBF), and Commodity Participants Association of India (CPAI), flagged potential challenges. They argued that stockbrokers and clients lack the systems to monitor existing notional-based position limits intraday. Adding to the complexity, Sebi’s consultation paper issued on February 24 proposes a shift to delta-based or futures-equivalent limits, with higher intraday thresholds than end-of-day (EOD) caps — a framework that could render current preparations obsolete once finalised.

 

As a result, Sebi has opted for a softer rollout, under which exchanges will monitor intraday limits and notify clients and trading members of breaches for risk management purposes, but no fines or violations will be recorded until further guidance is issued.