SEBI Tightens Entry And Exit Norms For Stocks In Derivative Segment

Capital markets regulator SEBI has approved stricter norms for entry and exit of individual stocks in the derivatives segment. The revised regulations aim to ensure market development, investor protection, and risk management. This step intends to remove stocks with low turnover from the F&O segment.

In a significant move to enhance market integrity, the Securities and Exchange Board of India (SEBI) on Thursday ratified stricter norms governing the entry and exit of individual stocks in the derivatives segment. The updated guidelines aim to facilitate market development, ensure robust investor protection, and manage associated risks.

Addressing the media post-board meeting, SEBI Chief Madhabi Puri Buch announced the formation of an expert group to scrutinize the Futures & Options (F&O) category. This committee is tasked with evaluating market growth, investor safety, and risk factors, and will subsequently submit its findings to the secondary market advisory committee.

'The board's decision is intended to foster a vibrant securities market ecosystem with apt regulation and investor safeguards,' stated the regulator. Outlining the revised criteria, SEBI seeks to expel stocks with consistently low turnover from the F&O segment, propelling a more liquid and robust market environment.

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