SEBI Revised Eligibility Criteria for Entry, Exit of Stocks in F&O Segment

Current Context: SEBI (Securities and Exchange Board of India) has recently revised the eligibility criteria for stocks to be included or excluded from the Futures and Options (F&O) segment.

• These changes are aimed at ensuring that only stocks with sufficient liquidity and market capitalization are included in the derivatives segment.
• Key Changes in the Eligibility Criteria:
• Increased Median Quarter Sigma Order Size (MQSOS): The minimum MQSOS required for a stock to enter the F&O segment has been increased from ₹25 lakh to ₹75 lakh. This means that the stock must have a minimum order size of ₹75 lakh to be eligible.
• Higher Market-Wide Position Limit (MWPL): The minimum MWPL for a stock has been raised from ₹500 crore to ₹1,500 crore. This limits the maximum amount of positions that can be held by all market participants in a particular stock.
• Revised Average Daily Delivery Value: The minimum average daily delivery value in the cash market has been increased from ₹10 crore to ₹35 crore. This indicates that the stock must have a certain level of underlying demand in the cash market.

Question:

1 SEBI has raised the Market-Wide Position Limit (MWPL) for a stock to qualify for the Futures and Options (F&O) segment. What is the new minimum MWPL?

• A) ₹500 crore
• B) ₹1,000 crore
• C) ₹1,250 crore
• D) ₹1,500 crore

Answer: D) The revised eligibility criteria by SEBI have increased the minimum MWPL from ₹500 crore to ₹1,500 crore, ensuring that only stocks with significant market capitalization are included in the derivatives segment.