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News Topical, Digital Desk : SEBI News: The Securities and Exchange Board of India (SEBI) has clarified the proposal to link leverage limits to cash positions in option trading that appeared in some media reports. SEBI has informed that at present no such proposal is under their consideration.

SEBI has said that the process of transparency and public consultation will always be adopted for any new rule or change in circular.

SEBI further said that recently some media organizations had reported that SEBI is considering linking leverage in option trading directly to the positions in the cash market. Its purpose was said to be to increase the liquidity of the cash market, reduce excessive speculation in the option market and protect retail investors. But SEBI has termed these reports as false. 

SEBI does not have any proposal According to SEBI, at present they do not have any proposal to link option leverage to cash position and there is no discussion on this subject. If any change is made in the future, then extensive consultation and review of rules will be done for this. This clear statement has come at a time when SEBI has taken strict steps to prevent increasing speculation and possible market manipulation in derivatives trading. In the last few months, SEBI has made several changes in the futures and options (F&O) market, such as increasing the contract size, advance recovery of premium, and monitoring of position limits. Experts believe that this move of SEBI is necessary for the stability of the market and protection of investors. However, for major changes like linking leverage to cash position in option trading, SEBI will take a transparent process and opinion of all stakeholders.


Read More: SEBI News: As soon as the market opened, SEBI gave big information, clarification came on cash position in option leverage

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