Effective April 1, stock exchanges will monitor position limits for index derivatives on an intraday basis. However, no penalties will be imposed for breaching existing position limits during the trading day until further notice.
“In addition to the End of Day monitoring mechanism as stated above, the position limits, for equity index derivative contracts, would also be monitored on an intraday basis from April 01, 2025. For this purpose, Stock Exchanges shall consider minimum 4 position snapshots during the day. The number of snapshots may be decided by the respective Stock Exchanges subject to a minimum of 4 snapshots in a day. The snapshots would be randomly taken during pre-defined time windows,” said the SEBI circular.
Additionally, intraday breaches will not be treated as violations unless new directions are issued by the regulator.
“Further, the existing framework of penalty structure for breach of end of day position limit shall be extended by exchanges for intraday position limit breaches as well,” it added.
The latest SEBI circular marks a shift from the regulator’s earlier proposal to implement a penalty framework for breaches of intraday position limits on index derivatives.
The relaxation aims to ease compliance burdens on market participants and provide greater flexibility in trading index derivatives.