New Delhi: The minimum contract size for equity derivatives will be set at Rs 5 lakh, applicable after the expiry of October contracts.
The Securities and Exchange Board of India (Sebi), the country's capital market regulator, has communicated the decision to stock exchanges.
The bourses have been asked to "increase the minimum contract size in equity derivatives segment to Rs 5 lakh effective from the next trading day after expiry of October 2015 contracts i.e. October 30, 2015".
Informing trading members about the revision, BSE on Monday said the lot size for derivatives contracts in equity derivatives segment would be fixed in such a manner that the contract value of the derivative on the day of review is within Rs 5-10 lakh.
"For stock derivatives if the market lot is not less than 50 then the lot shall be in multiples of 25... However, if the contract value of the stock derivatives at the minimum lot size of 50 is greater than Rs 10 lakh, then lot size shall be fixed in a multiple of 5, provided the lot size is not less than 10," it said in a circular.
For index derivatives, the lot size - in units of underlying - would be fixed as a multiple of 5, provided the lot size is not less than 10.
According to the circular, standardization of lot size would be carried out every six months based on the average of the closing price of the underlying for last one month.
"If the revised lot size is higher than the existing one, it will be effective only for new contracts... If the revised lot size is lower but not in multiple of the existing one, it will be effective only for new contracts," the circular added.
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