The Securities and Exchange Board of India (SEBI) released a consultation paper on February 24, 2025, titled “Enhancing Trading Convenience and Strengthening Risk Monitoring in Equity Derivatives.”
This paper proposes several measures aimed at refining risk management and trading efficiency in the equity derivatives market.
Key Proposals:
1. Real-Time Monitoring of Open Interest (OI): SEBI suggests providing market participants with near real-time intraday snapshots of Futures & Options (F&O) Open Interest to enhance risk management and decision-making.

2. Revised Exposure Limits for Mutual Funds (MFs) and Alternative Investment Funds (AIFs): The paper proposes changes to how exposure limits are calculated for MFs and AIFs in derivatives. While futures exposure calculation remains unchanged, options exposure (both long and short) would be measured using the Future Equivalent (FutEq) or Delta basis, ensuring it accurately reflects market sensitivity. Net exposure for each stock or index will be determined by offsetting long and short Delta values, with total exposure being the sum of all net FutEq exposures. Consequently, MF and AIF limits would be adjusted accordingly.

3. New Position Limits for Index Derivatives: To better reflect actual market risks, SEBI proposes new position limits for index derivatives. For index options, the end-of-day limits are set at ₹500 crore (net) and ₹1,500 crore (gross), while intraday limits are ₹1,000 crore (net) and ₹2,500 crore (gross). For index futures, the end-of-day limit has been increased from ₹500 crore to ₹1,500 crore, with an intraday limit of ₹2,500 crore.
SEBI has invited public comments on these proposals until March 17, 2025.
These measures aim to provide a more accurate snapshot of exposure at any given time, aligning more closely with cash market activity in terms of trading volumes and deliveries.
For a comprehensive understanding, you can access the full consultation paper on SEBI’s official website.