SEBI announces that minimum contract size for index derivatives will be increased | Capital market news

The Securities and Exchange Board of India (SEBI) has announced a set of regulations for stock index derivatives. Measures include increasing the minimum contract size, initial collection of options premiums and intra-day monitoring. In a crucial decision, the minimum contract size for index derivatives will be increased to ensure suitability of market participants, with new contracts being introduced after November 20, 2024, requiring a value of at least Rs 15 lakhs. SEBI is also streamlining weekly index derivatives offered by exchanges, by allowing a single benchmark with weekly expiration per exchange, to reduce excessive trading. It also introduced intraday monitoring of position limits, eliminated the benefits of calendar spreads on expiration days, streamlined weekly index derivatives, and increased tail risk hedging. The new laws will come into effect on February 1, 2025.

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