CIRCULAR
SEBI/HO/MRD/TPD/CIR/P/2025/ 122 September 01, 2025
To,
All Stock Exchanges,
All Clearing Corporations,
All Depositories,
Dear Sir/ Madam,
Sub: Framework for Intraday Position Limits Monitoring for Equity Index Derivatives
1. SEBI consultation paper dated February 24, 2025 on ‘Enhancing Trading
Convenience and Strengthening Risk Monitoring in Equity Derivatives’, proposed the
following Future Equivalent (FutEq) or delta equivalent positions limits for index
options:
S No. Position type Limit
1 End of day Net FutEq : ₹500 crores
Gross FutEq : ₹1,500 crores
2 Intraday Net FutEq : ₹1,000 crores
Gross FutEq : ₹2,500 crores
2. On the basis of feedback received from market participants and subsequent
deliberations in Secondary Market Advisory Committee (SMAC) of SEBI as well as
with Market Infrastructure Institutions (MIIs), following was stipulated for position limits
for index options (Para 5.5 of SEBI circular SEBI/HO/MRD/TPD-1/P/CIR/2025/79
dated May 29, 2025):
S No. Position type Limit Implementation Timeline
1 End of day Net FutEq : ₹1,500 crores Glide path : From July 01,
Gross FutEq : ₹10,000 2025 to December 05, 2025
crores Normal implementation :
December 06, 2025
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S No. Position type Limit Implementation Timeline
2 Intraday No limit specifically defined July 01, 2025
however end of day
position limits would be
monitored by Stock
Exchanges on an intraday
basis through random
snapshots from the
perspective of market
integrity / surveillance
concerns
3. On the basis of observed instances of outsized intraday FutEq positions created by
certain entities in index options on the day of contract expiry and the risks to market
integrity thereof, discussions were held with Stock Exchanges to strengthen the
intraday monitoring framework for index options.
4. In view of the aforesaid discussions and after deliberations in SMAC, it is decided to
implement the following entity level intraday monitoring framework for index options
to ensure market stability, while facilitating participation by various market participants
including liquidity providers / market makers:
4.1. Intraday Net position limit (FutEq basis) for each entity shall be ₹5,000 cr. (as
against end of day limit of ₹1,500 cr).
4.2. Intraday Gross position limit (FutEq basis) for each entity shall be ₹10,000 cr. (i.e.
separately both on long and short sides), same as the present end of day limit.
4.3. The aforesaid intraday limits shall continue to be monitored by Stock Exchanges
through a minimum of four random snapshots during the trading day (including
one snapshot between 14:45 hrs to 15:30 hrs i.e. around market closing time
where heightened activity is geberally observed).
4.4. Further, in order to monitor the intraday positions of entities, as mentioned
aforesaid, the Stock Exchanges shall consider the underlying price at the time of
taking positions snapshots.
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4.5. Entities shall be allowed to take additional exposure against holding of securities
or cash/cash equivalent, as applicable, in line with para 5.5.3 of SEBI circular
dated May 29, 2025.
4.6. For the entities breaching the aforesaid limits, Stock Exchanges shall examine
trading patterns of such entities which would inter-alia include seeking rationale
for such positions from the clients, examining trading in the constituents of the
index by the entity and discussing such instances with SEBI in the surveillance
meeting.
4.7. On the day of expiry of options contracts, the breaches of aforesaid position limits
shall additionally attract penalty/additional surveillance deposit, as decided jointly
by Stock Exchanges.
4.8. The aforesaid framework would facilitate market making activity on all trading days
while putting a check on creation of outsized intraday position on the expiry day
for orderly trading.
4.9. The aforesaid framework would also provide predictability, operational clarity, and
a fair balance between ease of trading and risk management.
4.10. The aforesaid framework shall be restricted to index options only.
5. Stock Exchanges and Clearing Corporations are advised to prepare a joint Standard
Operating Procedure (SOP) detailing modalities for intraday monitoring in line with the
instant circular and submit the same to SEBI within 15 days from the date of this
circular and issue an SOP to market participants before the Circular becomes
effective.
6. The provisions of the Circular shall come into effect from October 01, 2025 except for
the provision mentioned at para 4.7 above which shall come into effect from December
6, 2025 (i.e. at the end of glide path of FutEq based positions limits, as mentioned at
Para 2 above).
7. MIIs are required to take necessary steps to put in place systems processes, and
monitoring mechanisms for implementation of the Circular, including necessary
amendments to the relevant bye-laws, rules and regulations, if any.
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8. This Circular is being issued in exercise of the powers conferred by Section 11(1) of
Securities and Exchange Board of India Act, 1992 read with Regulation 51 of
Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations)
Regulations, 2018 and Section 19 of the Depositories Act, 1996 read with Regulation
97 of Securities and Exchange Board of India (Depositories and Participants)
Regulations, 2018 to protect the interest of investors in securities market and to
promote the development of, and to regulate the securities market.
9. The Circular is issued with the approval of Competent Authority.
10. This Circular is available on SEBI website at www.sebi.gov.in under the categories
“Legal Framework” and “Circulars”.
Yours faithfully,
Darshil D. Bhatt
Deputy General Manager
Technology, Process Re-engineering, Data Analytics
Market Regulation Department
Phone no. +91-22-26449735
Email: darshilb@sebi.gov.in
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