SEBI changes rules for inclusion of stocks in F&O, relaxes delisting norms

The Securities and Exchange Board of India (SEBI) on Thursday tweaked selection criteria for futures and options (F&O) stocks. The market regulator also eased norms for voluntary delisting and borrowing by alternative investment funds (AIFs). It also prohibited association of regulated entities with finfluencers.
The regulator has also set up a working group to enhance investors’ protection and improve risk management in equity derivatives.
Three different eligibility criteria for a stock’s inclusion in the derivatives segment – that includes the stock’s median quarter-sigma order size, market-wide position limit and a stock’s average daily delivery value – have been raised 3 to 3.5 times to Rs 25 lakh, Rs 500 crore and Rs 10 crore respectively.
The new rules are expected to raise the bar for launching F&O contracts on individual stocks in order to clamp down on chances of manipulation in the booming options market. SEBI Chairperson Madhabi Puri Buch told reporters on Thursday that the new criteria would be implemented gradually.
In a move that could make it easier for companies to delist from stock exchanges, the market regulator introduced a fixed price process for delisting frequently-traded shares and a delisting framework for investment and holding companies (IHC).
As an alternative to reverse book-building process, it has introduced a fixed price process at 15 per cent premium over the floor price. “If you think the floor price (of 15 per cent) is not fair, then don’t delist,” added Ms Buch. It has also reduced the threshold of a counter offer to 75 from 90 per cent, provided 50 per cent public shareholding is tendered.

Report By