NSE May Launch These Securities In Derivatives Market As SEBI Ban Expires

The National Stock Exchange of India Ltd. may launch securities in the derivatives market as the market regulator's six-month ban on the nation's largest bourse expired on Oct. 31.

As many as 14 securities could be included if they meet the eligibility criteria for trading in the futures and options market, according to Edelweiss Research.

• Top 500 stocks by average market capitalisation.
• Median quarter-sigma (order size) more than Rs 25 lakh.
• Market-wide position limit more than Rs 500 crore.
• Average daily delivery value in cash market more than Rs 10 crore.

Based on the eligibility criteria, Edelweiss said the stocks that could be included in the derivatives market are:

• Bandhan Bank Ltd.
• Avenue Supermarts Ltd.
• Edelweiss Financial Services Ltd.
• Godrej Properties Ltd.
• HDFC Asset Management Company Ltd.
• HDFC Life Insurance Company Ltd.
• Indiabulls Ventures Ltd.
• ICICI Lombard General Insurance Company Ltd.
• Jubilant Life Sciences Ltd.
• Info Edge (India) Ltd.
• Oberoi Realty Ltd.
• PNB Housing Finance Ltd.
• Reliance Nippon Life Asset Management Ltd.
• SBI Life Insurance Company Ltd.

Motilal Oswal in another sales note, however, named only eight stocks—HDFC Life, Avenue Supermarts, Info Edge, Bandhan Bank, Indiabulls Ventures, Edelweiss Financial Services, Jubilant Life Sciences and PNB Housing—that may be eligible for inclusion in the derivatives market.

In April, the Securities and Exchange Board of India had prohibited the stock exchange from accessing the securities market directly or indirectly for a period of six months. That was a part of the regulator's order asking the NSE to disgorge Rs 1,000 crore in penalty in the co-location case. The NSE has challenged SEBI's disgorgement order at the Securities Appellate Tribunal.

The brokerages said the ban expired on Oct. 31 and the NSE may introduce new securities in the derivatives market in the remaining two months of the ongoing calendar year. In such a case, this will be the first time in 2019 that the NSE will include any stock in the derivatives market.

The street, according to the brokerages, will watch out for the inclusion of asset managers and insurers that have outperformed in an otherwise volatile market.

The year started with 200 securities available for trading in the derivatives market. But since then, 56 stocks were excluded as they couldn't meet the enhanced eligibility criteria. At present, there are 144 stocks in the derivatives market, of which Hexaware Technologies Ltd., Union Bank and Tata Elxsi Ltd. will move out post December.