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This Article is From Oct 09, 2024

Stockbrokers Brace For Impact As SEBI Tightens Index Derivative Framework: ICRA

Stockbrokers Brace For Impact As SEBI Tightens Index Derivative Framework: ICRA
Stock brokers. (Source: Freepik)

NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICRA Report

Given the concerns on market stability and losses incurred by individual investors amid material increase in retail participation in index derivatives, on October 01, 2024, the Securities and Exchange Board of India introduced six measures to strengthen the equity index derivative framework for protecting market stability and enhancing investor protection.

The measures include rationalisation of weekly index derivatives, increase in their contract size, upfront collection of option premium from buyers, increase in margins on expiry days, removal of calendar spread benefits on expiry days, and enhancing the monitoring of position limits.

This follows the earlier consultation paper floated by the regulator in July 2024 on seven measures for promoting market stability.

Additionally, in a bid to enhance the protection of investors' cash collaterals, SEBI mandated qualified stockbrokers to offer facility of trading supported by blocked amount in the secondary market (cash segment) using the UPI block mechanism or the 3-in-1 trading facility, which was optional so far.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

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