SEBI tightens F&O Rules. Minimum contract for lot size increased to Rs 15 Lakhs.
The Securities & Exchange Board of India (SEBI) just announced major changes in F&O segment.
As per SEBI,these changes are aimed to reduce the losses incurred by the retail participants by reducing their participation in the F&O segment.
SEBI Releases Circular on Tightening of Equity Index Derivative Framework:
- Mandates upfront option premium collection from index option buyers.
- Tightens F&O rules, effective in phases starting November 20.
- Removes calendar spread treatment on the expiry day.
- Upfront collection of option premium from options buyers.
- Mandates additional margin requirement of 2% for short option contracts on the day of options expiry.
- Increases minimum trading amount for derivatives from Rs 5 lakhs to Rs 15 lakhs
- For index derivatives, the minimum contract size has been raised to Rs 15 lakhs.
- Lot sizes should be maintained between Rs. 15 lakhs and Rs. 20 lakhs for contract values
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The effective dates for the implimentation of the changes are :
| Sr. No. | Measure | Effective From |
|---|---|---|
| 1 | Upfront collection of Option Premium from buyers | February 01, 2025 |
| 2 | Removal of Calendar spread treatment on the Expiry Day | February 01, 2025 |
| 3 | Intraday monitoring of position limits | April 01, 2025 |
| 4 | Contract size for index derivatives | November 20, 2024 |
| 5 | Rationalization of Weekly Index derivatives products | November 20, 2024 |
| 6 | Increase in tail risk coverage on the day of options expiry | November 20, 2024 |
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