Overview

• The regulator’s Secondary Market Advisory Committee backed a net intraday limit of Rs 1,500 crore per entity in equity index derivatives and sent the proposal to SEBI’s board for a decision.
• Under the proposal, exchanges would levy penalties for breaches on contract expiry days and report violations to the regulator.
• SEBI’s data review indicated intraday positions on expiry days often exceed existing end-of-day caps of Rs 15,000 crore net and Rs 1 lakh crore gross, underscoring the need for a defined intraday threshold.
• An earlier plan for a Rs 10,000 crore intraday cap was dropped after pushback from large market-makers, after which exchanges were told to intensify intraday monitoring.
• The panel also urged tighter recording of activity by connected foreign entities that route trades through intermediaries.