SEBI hints at tightening rules for shares traded in F&O segment

The Securities and Exchange Board of India (SEBI) has come up with a proposal to tighten rules for listing and maintenance of shares in the futures and options (F&O) segment. If the revised new rules are adopted, many stocks with consistently low derivatives turnover and open interest will be delisted.

Recently listed large companies will be allowed to enter the list. F&O represents the maximum trading volume. This amendment has been proposed for the first time in the last six years. Which was eagerly awaited by the market participants. Since, there has been no change in the list of derivative stocks for the last two years.

Currently, 182 stocks are eligible for trading in the derivatives segment, down from a peak of 209 stocks in 2018. The F&O selection criteria is important, as stocks included in the popular Nifty, Sensex and other indices must be part of the derivatives segment.

After the approval of this proposal, the existing shares will be Rs. The average daily trading volume (ADTV) for the last six months should be between Rs 30 crore to Rs 40 crore against the ten crore benchmark. The MWPL should be between Rs 1,250 crore to Rs 1,750 crore. Which is much higher than the current requirement of Rs 500 crore. To be included in the F&O segment, the MQSOS of a stock should be between Rs 75 lakh to Rs 1 crore on a rolling basis in the last six months. Only the top 500 stocks will be eligible to be a part of the F&O segment. Which achieved an average daily trading volume (ADTV) of Rs 432 lakh crore in the month of May on an estimated basis.

New rules

After the approval, the shares are currently at Rs. The average daily trading volume (ADTV) for the last six months should be between Rs. 30 crore and Rs. 40 crore against the benchmark of ten crore.

MWPL will require between Rs 1,250 crore and Rs 1,750 crore, significantly higher than the current requirement of Rs 500 crore.

To be included in the F&O segment, the stock must have MQSOS between Rs 75 lakh and Rs 1 crore on a rolling basis in the last six months.