look news india
New Delhi, September 02 (HS). Market regulator Securities and Exchange Board of India (SEBI) has changed the rules for entry and exit of stocks in the derivatives segment. This change made by SEBI has come into effect with immediate effect.
SEBI has increased the Median Quarter Sigma Order Size (MQSOS) to 3 times. Similarly, the Minimum Market Wide Position Limit (MWPL) has been increased to 3 times and the Average Daily Delivery Value (ADDV) has been increased to 3.5 times. SEBI has taken this step so that only high quality stocks can trade in the derivatives segment. Actually, MQSOS is an indication of the liquidity of any stock. The higher its number, the more difficult it becomes to manipulate the price of stocks artificially.
As per the new rules, MQSOS has been increased from Rs 25 lakh to Rs 75 lakh. Similarly, MWPL has been increased from Rs 500 crore to Rs 1,500 crore. This will make it possible to ensure that only stocks with high market positions remain in the derivatives segment.
SEBI has said that these rules for entry and exit of stocks have been reviewed for the first time since 2018. In view of the functional and experimental changes in various market parameters after 2018, it has been decided to change these rules. Under these changes, now stocks whose average daily delivery value is less than Rs 35 crore will be excluded from the derivative segment. Earlier, the limit of average daily delivery value was Rs 10 crore.
SEBI has stated that if a stock fails to meet the standards as per the changes made in MQSOS, MWPL and ADDV for 3 consecutive months, then it will automatically be out of the derivative segment. No new contract can be issued on such stocks. However, even at the time of exit, trading in those contracts will be possible until the contracts expire. To comply with these rules, SEBI has also launched a new product called Success Framework, which will decide which stock should be excluded from the derivative segment.
