Sebi extends F&O curbs till May 28

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Published: April 21, 2020 2:59 AM

On March 20, Sebi had announced some measures keeping in view the objective of ensuring orderly trading and settlement, effective risk management, price discovery and maintenance of market integrity.

Sebi had said in March that derivative exposure of investors should not exceed the value of their cash holdings and that margins for F&O stocks would be raised to 40% in a phased manner.Sebi had said in March that derivative exposure of investors should not exceed the value of their cash holdings and that margins for F&O stocks would be raised to 40% in a phased manner.

Capital markets regulator Sebi on Monday said regulatory measures on short-selling announced to curb volatility in the market would continue till May 28, 2020. The Securities and Exchange Board of India (Sebi) had announced a slew of measures in the view of a sharp increase in volatility in the market following the outbreak of the coronavirus pandemic. On March 20, Sebi had announced some measures keeping in view the objective of ensuring orderly trading and settlement, effective risk management, price discovery and maintenance of market integrity.

Sebi had said in March that derivative exposure of investors should not exceed the value of their cash holdings and that margins for F&O stocks would be raised to 40% in a phased manner. The move was announced to control the speculation in the Indian markets due to the sharp correction in domestic as well as international indices.

The curbs on short-selling were applicable to mutual funds, foreign portfolio investors (FPIs), trading members (their proprietary books and clients holding in stocks). The measures taken by Sebi on March 20 were followed by a nationwide lockdown announced by the prime minister. After assessing the situation of COVID-19 pandemic in India, the MHA has recently extended the lockdown in the country up to May 3.

According to the Sebi, as the stock markets (both domestic and global) are expected to be volatile in the near future owing to concerns relating to novel coronavirus and the resultant fear of economic slowdown, it has been decided that the measures implemented since March 23, 2020 will continue to be in force till May 28, 2020.

Sebi also said that stock exchanges and clearing corporations would be issuing necessary instructions to the market participants in this regard. “Sebi and market infrastructure institutions like stock exchanges, clearing corporations and depositories are continuously monitoring the market developments and will take any further suitable actions as may be required,” Sebi said on Monday.

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