The Securities and Exchange Board of India (Sebi) on Friday tightened the criteria for moving derivatives stocks to physical settlement.
The move follows a sharp swing in stocks belonging to frontline groups, amid concerns surrounding high share pledging in recent weeks. In a circular, Sebi said a stock will be moved to physical settlement from the new expiry cycle if any of the conditions are met.
These include intra-day movement of 10 per cent or more on 10 occasions in the last six months or three occasions in one month; or 25 per cent-plus intra-day movement on one occasion in a month. Recently, shares of several firms saw a drop of above 25 per cent in a single day. However, existing contracts will be settled under the prevailing mode, which in most cases is cash.
The move follows a sharp swing in stocks belonging to frontline groups, amid concerns surrounding high share pledging in recent weeks. In a circular, Sebi said a stock will be moved to physical settlement from the new expiry cycle if any of the conditions are met.
These include intra-day movement of 10 per cent or more on 10 occasions in the last six months or three occasions in one month; or 25 per cent-plus intra-day movement on one occasion in a month. Recently, shares of several firms saw a drop of above 25 per cent in a single day. However, existing contracts will be settled under the prevailing mode, which in most cases is cash.
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