SEBI Tightens Monitoring Rules for Intraday Positions in Equity Derivatives

India’s market regulator, the Securities and Exchange Board of India (SEBI), has introduced fresh rules to monitor intraday positions in equity derivatives. The move comes after SEBI temporarily barred U.S.-based high-frequency trading firm Jane Street from Indian markets, citing manipulative strategies that hurt retail investors.

Under the new framework, effective October 1, SEBI has set an intraday net position limit of ₹50 billion ($571 million) per entity in index options, compared with the current end-of-day limit of ₹15 billion ($171 million). Gross intraday exposure will be capped at ₹100 billion ($1.14 billion), applied separately to long and short positions. Stock exchanges will track compliance using at least four random snapshots during the trading day, including one during peak market hours between 2:45 pm and 3:30 pm.

Entities breaching these limits will face scrutiny, with stock exchanges examining trading patterns and seeking explanations. SEBI added that violations on the day of a derivative contract’s expiry will attract penalties, the quantum of which will be determined by stock exchanges.

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