Containing volatility

Sebi's action pragmatic, but will not change market reality

The Securities and Exchange Board of India (Sebi) has taken several measures to reduce volatility across markets. The regulator has raised margins for stocks, and lowered the market-wide position limit for stock futures to curb speculation. It has also set a limit of Rs 500 crore on index derivatives positions taken by mutual funds, financial institutions, and proprietary traders. It has imposed penalties at up to 10 times the prescribed minimum for non-compliance.
 
These measures are broadly in line with actions taken by many overseas market regulators, which are all struggling to cope with the pandemic. European exchanges have