SEBI plans stricter eligibility criteria for inclusion of stocks in F&O segment

The board believes that stricter rules could constrain the access of numerous thinly-traded stocks into the coming time and will give options.

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The Securities and Exchange Board of India (Sebi) is intending to set an eligibility criteria for including stocks into the wealth derivatives segment. The board believes that stricter rules could constrain the access of numerous thinly-traded stocks into the coming time and will give options.

The proposal is said to be presented in a recent Sebi-appointed Secondary Market Advisory Committee (SMAC) conference, where the capital markets regulator has asked for advice from the committee members on the issue. In the meeting the regulator concluded that for being eligible in the inclusion once has to at least have an average daily delivery value of a share at about ₹10 crore to ₹20 crore in the prior six months on a rolling basis. However, the mentioned value can be under the SLB or Securities Lending and Borrowing scheme too.

Not only this but the regulator has further asked for double the market-wide position barrier for the ongoing ₹500 crore to ₹1,000 crore shares on a rolling basis, raising the bar for the inclusion of stocks into the segment. On the date of contract expiry in the month, the number of shares valued by taking the closing prices of stocks with the proposed cash will be the market-wide position limit.

However, the market regulator is also expected to include a new regulation in the F&O segment. Where for being eligible for F&O segment the stock should be exchanged by 15% of the registered brokers or at least 200 brokers. Moreover, the Newly-listed stocks can only participate after six months of listing.

As of now, more than 195 stocks trade in the F&O segment on the regulator. And, there are 135 of them which pass the new criteria. Meanwhile, the implementation of proposed plan is still doubtful.

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