India’s market regulator, the Securities and Exchange Board of India (SEBI), has announced new limits on intraday positions in equity index derivatives. The rules will take effect on Oct. 1, 2025, and aim to reduce risk in one of the world’s busiest derivatives markets.
The SEBI set a net intraday exposure cap of ₹50 billion ($571 million) per participant. It also introduced a gross exposure cap of ₹100 billion ($1.14 billion), applied separately for long and short index option positions. These tighter limits are meant to keep trading activity under closer control, especially on volatile expiry days.
To ensure compliance, stock exchanges must run at least four random intraday checks each day. One of these checks must take place during the peak trading period between 14:45 and 15:30 IST, when activity is typically highest. Traders who exceed the new limits will face closer monitoring, and exchanges may impose penalties. The final decision on fines will rest with the exchanges, giving them flexibility in how they apply sanctions.
The new framework follows the SEBI’s earlier suspension of U.S. high-frequency trader Jane Street. Regulators accused the firm of manipulative practices that caused harm to retail investors. That action highlighted the need for stricter oversight in a market where intraday positions can swing dramatically within minutes.
Also in May, the SEBI revealed it was preparing to roll out a new set of rules aimed at curbing the misuse of proprietary trading terminals amid growing concerns over margin evasion and regulatory circumvention. According to sources close to the matter, brokers in India have been renting out prop terminals to professional traders for a fixed fee or revenue share, which allows traders to bypass client margin requirements by classifying their trades as “proprietary.”
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