{"id":358803,"date":"2025-09-03T11:30:52","date_gmt":"2025-09-03T06:00:52","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=358803"},"modified":"2025-09-03T13:33:29","modified_gmt":"2025-09-03T08:03:29","slug":"sebi-equity-derivatives-intraday-limits-2025","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/09\/03\/sebi-equity-derivatives-intraday-limits-2025\/","title":{"rendered":"SEBI\u2019s new Framework set \u20b910,000 Crore Cap on Intraday Equity Index Derivatives"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\">On 1-9-2025, the Securities and Exchange Board of India (&#8216;<span style=\"font-weight: bold;\">SEBI<\/span>&#8217;) notified <span style=\"font-weight: bold;\">Framework for Intraday Position Limits Monitoring for Equity Index Derivatives<\/span>, marking a pivotal step toward enhancing market integrity and risk management in the derivatives segment. The whole circular will be effective from <span style=\"font-weight: bold;\">1-10-2025<\/span> with one specific provision, pertaining to expiry-day penalties, becoming effective from <span style=\"font-weight: bold;\">6-12-2025<\/span>.<\/p>\n<h3>Key points:<\/h3>\n<ol style=\"list-style-type: decimal;\">\n<li>\n<p>This initiative is formalized through SEBI Circular issued on 29-5-2025, aiming to strike a balance between facilitating trading convenience and curbing excessive speculative activity, especially on contract expiry days.<\/p>\n<\/li>\n<li>\n<p>SEBI&#8217;s initial consultation paper (Feb 24, 2025) proposed modest intraday and end-of-day limits. However, based on feedback from market participants and deliberations with the Secondary Market Advisory Committee (&#8216;SMAC&#8217;) and Market Infrastructure Institutions (&#8216;MIIs&#8217;), the final framework significantly revised these thresholds.<\/p>\n<\/li>\n<li>\n<p>With this framework, <span style=\"font-weight: bold;\">SEBI<\/span> introduces entity-level intraday position limits based on Futures Equivalent (FutEq) values, setting a cap of <span style=\"font-weight: bold;\">&#8377;5,000 crore<\/span> for net positions during the trading day. This is significantly higher than the end-of-day net limit of <span style=\"font-weight: bold;\">&#8377;1,500 crore<\/span>, allowing entities more flexibility during active trading hours.<\/p>\n<\/li>\n<li>\n<p>A <span style=\"font-weight: bold;\">gross intraday cap of &#8377;10,000 crore per entity<\/span> has been imposed, applicable separately to long and short positions. This ensures that directional bets remain within reasonable bounds, even if offsetting positions are held.<\/p>\n<\/li>\n<li>\n<p>These limits are designed to:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Ensure orderly trading and market stability<\/p>\n<\/li>\n<li>\n<p>Prevent outsized intraday exposures, particularly on expiry days<\/p>\n<\/li>\n<li>\n<p>Support liquidity provision and market making<\/p>\n<\/li>\n<li>\n<p>Provide predictability and operational clarity for market participants<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>To ensure compliance, stock exchanges are required to monitor intraday positions using at least four random snapshots of trading activity during the day. One of these snapshots will be taken between <span style=\"font-weight: bold;\">14:45 hrs and 15:30 hrs<\/span>, a time window known for heightened trading activity due to market closing and expiry dynamics.<\/p>\n<\/li>\n<li>\n<p>Stock Exchanges will calculate FutEq positions using the prevailing underlying index price at the time of each snapshot. This ensures accurate assessment of exposure, accounting for real-time fluctuations in option deltas and index values.<\/p>\n<\/li>\n<li>\n<p>The framework allows entities to take <span style=\"font-weight: bold;\">additional intraday exposure<\/span> beyond the standard limits if they have adequate backing in the form of <span style=\"font-weight: bold;\">securities, cash, or cash equivalents<\/span>.<\/p>\n<\/li>\n<li>\n<p>If an entity breaches the prescribed intraday limits, SEBI can initiate a <span style=\"font-weight: bold;\">surveillance review<\/span>. This includes:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Seeking a <span style=\"font-weight: bold;\">rationale<\/span> from the client for the breach<\/p>\n<\/li>\n<li>\n<p>Examining the entity&#8217;s trading activity in <span style=\"font-weight: bold;\">constituent stocks of the index<\/span><\/p>\n<\/li>\n<li>\n<p>Discussing the breach with SEBI during <span style=\"font-weight: bold;\">surveillance meetings<\/span><\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>This multi-layered approach ensures that breaches are not only detected but also investigated thoroughly to understand intent, assess risk, and determine if further regulatory action is warranted.<\/p>\n<\/li>\n<li>\n<p>On the <span style=\"font-weight: bold;\">expiry day of options contracts<\/span>, any breach of intraday position limits will attract <span style=\"font-weight: bold;\">additional penalties or surveillance deposits<\/span>. This provision becomes effective from <span style=\"font-weight: bold;\">6-12-2025<\/span>, aligning with the end of the glide path for end-of-day position limits.<\/p>\n<\/li>\n<li>\n<p style=\"margin-bottom: 3%;\">Exchanges and Clearing Corporations are required to jointly submit a Standard Operating Procedure (&#8216;SOP&#8217;) to SEBI<span style=\"font-weight: bold;\"> within 15 days of the circular&#8217;s issuance.<\/span><\/p>\n<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">SEBI introduces Intraday Position Limit Framework for Equity Index Derivatives to enhance market integrity, risk management, and surveillance, from October 1, 2025<\/p>\n","protected":false},"author":67525,"featured_media":358823,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,1193],"tags":[88476,73689,39984,88479,88473,88471,88478,88472,88477],"class_list":["post-358803","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legislationupdates","category-notifications","tag-derivatives-market-regulation","tag-equity-index-derivatives","tag-indian-stock-market","tag-intraday-exposure-limits","tag-intraday-position-monitoring","tag-sebi-intraday-limits","tag-sebi-surveillance-framework","tag-sebi-trading-rules","tag-trading-risk-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>SEBI Sets Intraday Limits for Equity Derivatives | SCC 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