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Sebi introduces new norms to cub volatility

  •   Fri, Mar 20 2020 10:57:48 PM

Mumbai, March 20 (IANS): Markets regulator SEBI on Friday announced measures to control the high volatility which has plagued the country's stock markets.

In a statement, the Sebi said that these new norms will be effective from the beginning of trade on March 23 for a period of one month.

These measures include the introduction of limits on open positions for going short or long in Index derivatives.

The norm mandates that short positions in index derivatives shall not exceed the "Mutual Funds'/FPIs'/Trading Members'/Clients'" holding of stocks.

Similarly, long positions in index derivatives shall not exceed the "Mutual Funds'/ FPIs' holding of cash, government securities, T-Bills and similar instruments".

Sebi said that these measures will be implemented to ensure orderly trading and settlement, effective risk management, price discovery and maintenance of market integrity.

The new measures are expected to reduce liquidity in the market.

 
  

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