The Securities and Exchange Board of India (SEBI) has announced that starting April 1, 2025, stock exchanges will begin monitoring at least four position limits for index derivatives during intraday trading.
However, SEBI clarified that there will be no penalties for exceeding the current position limits.
To improve transparency, SEBI has instructed the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) to create a Standard Operating Procedure (SOP).
This SOP will guide traders on how notional position limits will be monitored throughout the trading day.
Additionally, stock exchanges must inform customers and trading members about any violations for better risk management.
Guidelines for Intraday Position Monitoring
In a circular dated December 30, 2024, SEBI directed stock exchanges and clearing corporations to implement intraday position monitoring, in addition to the existing ‘End of Day’ system.
Starting April 1, 2025, equity index derivative contract position limits will be tracked throughout the trading day.
To do this, stock exchanges must capture at least four position snapshots at different times.
While exchanges have the freedom to decide the exact number of snapshots, a minimum of four per day is mandatory.
Penalty for Violations
The position snapshots will be taken randomly within set time intervals. The circular also introduced a penalty structure for violations, similar to the one already in place for end-of-day position limit breaches. This means that intraday position limit violations will now be subject to the same penalties.
