SEBI floats consultation paper to reduce activity in derivatives segment.
Key measures include
1. Collection of option premiums on an upfront basis
2. Revision in minimum contract size:
Sebi proposed to revise the minimum contract size for index derivative contracts under two phases.
In the Phase 1, the interval for the minimum value of derivatives contract is proposed to be revised to Rs 15-Rs 20 lakh. After six months, this minimum value can be raised to Rs 20-30 lakhs.
At present, the minimum contract size requirement for derivative contracts is Rs 5-10 lakhs, which was last set in 2015
3. Intraday monitoring of position limits
4. Increase in margin near contract expiry
The paper proposes to increase the margins on expiry day and the day before expiry in the following manner:
At the start of the day before expiry, the Extreme Loss Margin (ELM) to be increased by 3%.
At the start of the expiry day, ELM is to be further increased by 5%
5. Weekly index products
To enhance investor protection and promote market stability in derivative markets, weekly options contracts to be provided on single benchmark index of an exchange, Sebi proposed
6. Strike price rationalisation for options
7.Removal of calendar spread benefit
For more details read below SEBI article
