Regulations
SEBI tightens liquidity norms for derivative segment

Shares with a minimum trading volume of Rs10 lakh and market wide position limit or market capitalisation of Rs300 crore would be eligible for entry into the Future and Options segment

 

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has hiked the benchmark liquidity level for any scrip to be eligible for trading in the derivatives segments, a move aimed at checking any manipulation by doing away with illiquid stocks, reports PTI.

Now scrips with a minimum trading volume of Rs10 lakh and market wide position limit (MWPL) or market capitalisation of Rs300 crore would be eligible for entry into the Future and Options (F&O) segment, SEBI said in a circular.

"In order to improve market integrity, it has been decided, in consultation with Stock Exchanges, to tighten the eligibility and exit criteria for stocks in derivatives segment," SEBI said.

The move is likely to help curb any manipulation in share prices and bring in more meaningfulness to the F&O segment, experts said. Besides, it will enhance liquidity in the derivative segment, they added.

Currently over 220 scrips trade in the F&O segment in the National Stock Exchange. Of these, only around 100 scrips are likely to meet the new eligibility criteria set by SEBI, experts said.

"Through this move SEBI wants to ensure that only relevant stocks with good amount of liquidity is able to trade in the F&O segment and help curb manipulation," SMC Global Securities Strategist & Head of Research Jagannadham Thunuguntla said.

SEBI said the minimum Median Quarter Sigma Order Size (MQSOS), which indicate liquidity or order size in a scrip, requirement for introduction in derivatives segment has been revised to Rs10 lakh, from Rs5 lakh at present.

Also the MWPL, indicating the size of the company, has been raised to Rs300 crore, from Rs100 crore.

It further said scrips which fail to maintain a minimum MWPL requirement of Rs200 crore would cease to be in the F&O segment. Earlier this limit was Rs60 crore.

The scrip would exit the derivative segment if MQSOS falls below Rs5 lakh. Earlier this limit was Rs2 lakh, SEBI said.

Further to assess the trading depth of a scrip in the derivatives segment, SEBI said the trading stock derivatives should have an average monthly turnover of Rs100 crore in the last three months.

"No fresh month contract shall be issued on stocks that may exit the F&O segment," SEBI said while allowing the existing unexpired contracts to trade till expiry.
 

User

COMMENTS

R Balakrishnan

4 years ago

The absolutely low limit set shows how narrow and shallow our stock markets are. Could the market cap not have been kept above a decent size, say, Rs.10,000 crores? And a ten lakh daily volume? Not even matches the volume that a HNI would deal with in a stock. We are pretending to be a financially developed nation, using toy soldiers for a war

Women households have higher income in India and Ghana

According the three-nation study project "Poverty eradication in Afro-Asian countries", women households engaged in micro enterprise activities were found to have higher income in India and Ghana due to certain favourable policy directions

Kochi (Kerala): A recent British Council sponsored study has found that women houses holds engaged in micro enterprise activities in India and Ghana have higher income compared to their male counterparts, reports PTI.

Certain favourable policy directions from their respective government agencies have helped the women entrepreneurs to earn more, said the three-nation study project "Poverty eradication in Afro-Asian countries".

"Women households engaged in micro enterprise activities were found to have higher income in India and Ghana on account of certain favourable policy directions from government agencies like RBI and organised institutions like SEWA and Kudumbasree," Prof T Arun, Director, Institute of Global Finance and Development, Lancashire Business school and Dr Radha Thevannor, SCMS Group Director, said.

Risk coping mechanism among women was higher in India compared to Ghana and Tanzania, they said.

Sponsored by the British Council and undertaken by the SCMS in collaboration with institutions in Britain, Tanzania and Ghana, the three-year study also found that key issues in microfinance relate to well-being of households whether it is male or female dominated.

It was also found that well-being of women entrepreneurs over the period has increased and well-being of women entrepreneurs was higher in India followed by Ghana and Tanzania, it said.

The study was conducted in India, Ghana and Tanzania where 500 people were selected from each countries and 320 were provided two weeks training.
 

User

RBI to issue Rs5, Rs10 coins to commemorate 60 years of Parliament

On 13th May 1952, the two Houses of the Parliament held their first sessions, following the...

Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)