Stock Market New Rules Explainer: From October 1, the biggest rule in the history of shares will change, know the answer to every question.

News Topical, Digital Desk : The new rules will come into effect on October 1. The Securities and Exchange Board of India (SEBI) has made a major change to the rules related to the futures ban. A new formula for calculating open interest (OI), known as the futures equivalent or delta-based formula, will now be implemented. This will directly impact which stocks will be placed on the futures and options (F&O) ban list and for how long they will remain there.

What major changes will happen in the market from October 1?
SEBI has implemented several new regulations for equity derivatives. These include a new MWPL (Market-Wise Position Limit) definition, trading conditions during the ban period, intraday limits on index derivatives, and entity-level caps on single-stock derivatives. These are intended to curb speculation and strengthen risk management. 

How will the new MWPL (Market-Wide Position Limit) be determined? MWPL is now linked to cash market volume and free float. The formula will be 15% of free float or 65 times the average cash delivery volume (ADDV) of the previous three months, whichever is lower. Previously, it was based on 20% non-promoter holding. Suppose the non-promoter shareholding in a stock is 1 billion shares. Previously, MWPL = 20% × 1 billion = 200 million shares. New rule - Now MWPL = 15% of Free Float or 65 times ADDV (Average Daily Delivery Volume), whichever is less. Example If Free Float = 80 crore shares → 15% = 12 crore shares If ADDV = 10 lakh shares → 65 × 10 lakh = 6.5 crore shares Then MWPL will be = 6.5 crore shares (because it is less). 2. New way of trading during ban period Old rule - If OI (Open Interest) of any stock crosses 95% of MWPL, then it goes into ban. During the ban period only reduction of positions was allowed, new positions could not be created. New rule - Now positions can be created even during the ban, but the condition is that OI should decrease to less at the end of the day. For example , suppose a stock crosses 96% of MWPL and gets banned. If a trader covers his old short position, then OI will decrease, this is valid. But if someone creates a new long position, due to which OI increases → this will not be valid. Intraday Position Limit (Index Derivatives) SEBI has imposed an intraday cap on index derivatives. Example - An FII has a net position of ₹6,000 crore in NIFTY Futures in a day → this is above the ₹5,000 crore limit and will be a violation of the rule. If a broker's gross exposure is ₹12,000 crore, this is above the ₹10,000 crore limit, a penalty will be imposed. The exchange will check by taking snapshots 4 times a day. 4. Limits in single-stock derivatives: Suppose the MWPL of a stock = 100 million shares. An individual investor can hold a maximum of 10% = 10 million shares for OI. A prop broker can hold a maximum of 20% = 20 million shares. FPIs and brokers together can hold a maximum of 30% = 30 million shares. This will prevent excessive control by any single large player. 5. What changes will come next? November 3, 2025: New eligibility criteria for non-benchmark index derivatives. December 6, 2025: Pre-open and post-closing sessions in the F&O segment, and penalties for breaching limits on expiry day. 

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