SEBI Issued New Guidelines for Intraday Index Derivative Monitoring

Current Context: SEBI has introduced new guidelines for monitoring intraday position limits for index derivatives, effective April 1, 2025.

Here are the key points:

• Intraday Monitoring: Stock exchanges are required to monitor position limits for index derivatives multiple times during the trading day. A minimum of four random snapshots will be taken within predefined time windows.
• No Penalties for Now: Breaches of these intraday limits will not attract penalties or be considered violations until further notice.
• Proposed Changes: SEBI is also working on a new system with delta-based or futures-equivalent limits, which may allow higher intraday limits compared to end-of-day limits.
• Standard Operating Procedure (SOP): Exchanges like NSE and BSE must prepare an SOP to inform market participants about the monitoring process and notify them of any breaches.

Question:

Q.1 According to the new SEBI guidelines, effective April 1, 2025, how frequently will stock exchanges be required to monitor intraday position limits for index derivatives?
a) Once at the beginning of the trading day
b) Once at the end of the trading day
c) A minimum of four times during the trading day at random intervals within predefined time windows
d) Continuously throughout the trading day

Answer: c) Stock exchanges are required to monitor position limits for index derivatives multiple times during the trading day. A minimum of four random snapshots will be taken within predefined time windows.