Sebi tweaks criteria for inclusion, deletion of stocks from F&O segment

Market regulator Sebi has revised the criteria for the inclusion and deletion of stocks from the futures and options (F&O) segment.

The move could lead to the addition and deletion of about two dozen stocks.

The new entrants and exits would play a key role in the selection of benchmark indices Nifty and Sensex, as only such eligible F&O stocks find space in the indices.

The revision in eligibility criteria comes nearly six years after the last revision in the selection conditions.

Under the new rules, the market-wide position limit (MWPL), median quarter sigma order size (MQSOS), and average daily delivery value (ADDV) have been revised to Rs 75 lakh, Rs 1,500 crore, and Rs 35 crore, respectively.

Sebi has also extended the ‘product success framework’ (PSF) for single stock derivatives, similar to that for index derivatives.

The changes come amid ever-scaling volumes and rising market capitalisation, which surpassed $5 trillion for the first time last month.

The PSF for stock derivatives will ensure that there is sufficient turnover, open interest, and widespread participation from more brokers and a higher number of days. However, the requirement of being amongst the top 500 stocks to be eligible will continue.