FIA has submitted a response to the Securities and Exchange Board of India’s consultation paper on Enhancing Trading Convenience and Strengthening Risk Monitoring in Equity Derivatives. While supporting SEBI’s broader objectives of market stability and risk management, FIA raises key concerns about the introduction of delta-based position limits and proposed changes to open interest formulation.
The response highlights the potential market disruptions from imposing gross delta limits. FIA advocates for retaining the existing end-of-day Gross Notional OI Limit, which is well understood by the industry, without introducing a delta adjustment.
If SEBI proceeds with an EOD Net FutEq limit, FIA recommends setting it in line with the current scale of India’s derivatives market to avoid unintended consequences. FIA further recommends extending the consultation period to allow for in-depth industry discussions and comprehensive market feedback.
Read the response in full.
