Monitoring derivatives

The pronounced stock market volatility has jolted SEBI into action. It plans to review the risk management framework for derivatives.

Safeguards on anvil SEBI to review the risk management framework Circuit filters on derivative stocks likely Curbs expected on marketwide open position for traders

It now proposes to introduce circuit filters on derivative stocks, an overhaul of the margin framework and restricting the marketwide open position for traders.

Analysts feel it will be timely as retail investors have booked heavy losses in F&O recently. Says Arun Kejriwal, Director, KRIS: “There is a need for SEBI to tighen the eligibility criteria for stocks to enter the F&O segment. Additionally, SEBI should scrap the mini-contract, thus, restricting the entry of small retail investors into the market.”

— Manu Kaushik