Sebi proposals likely to curb manipulation in F&O trades

The Securities and Exchange Board of India (SEBI) has proposed changes to the methodology used for calculating outstanding positions in stock futures and options. This change aims to reduce the potential for manipulation in derivatives trading. The plan includes introducing stricter rules, such as regular monitoring of positions during trading sessions, in response to growing concerns that a few influential firms, equipped with advanced technology, may be manipulating trades in the country’s expanding futures and options markets.

In a consultation paper released late Monday, the capital markets regulator suggested modifications to the calculation of Open Interest (OI)—the total value of outstanding positions in futures and options—as well as the Market Wide Position Limit (MWPL), which sets the maximum number of positions allowed in stock derivatives.​