LIC, YES Bank among 78 stocks that can enter F&O list if Sebi changes rules
Sebi proposes to revise criteria for derivatives market, potentially adding 78 stocks like LIC, Zomato, YES Bank. Changes include higher thresholds for order size, market-wide position limits, and introducing Product Success Framework for single-stock derivatives after 6 months.
At least 78 like , , , , , RVNL, and Adani Green could enter the F&O list as the markets has proposed to the selection for entry and exit of stocks in the ."The last review of the eligibility criteria for introducing stocks in the derivatives segment was conducted in 2018. Since then, market parameters reflecting the size and of the cash market, viz., market capitalization and turnover have moved up considerably," said in a on the issue.
Under the proposed rules, wants to increase the Median Quarter Sigma Order Size from Rs 25 lakh to Rs 75 lakh-Rs 1 crore. The market-wide position limit has also been proposed to be raised from Rs 500 crore to Rs 1,250 crore-Rs 1,750 crore.
Sebi has also proposed to introduce the Product Success Framework (PSF) for single-stock derivatives. PSF shall be applicable only for those stock derivatives which have completed at least 6 months from the month of introduction.
"This is required to ensure that stocks have sufficient turnover, open interest and widespread participation. The criterion of six months is needed so that stocks have a sufficient gestation period," the regulator said.
After studying the rules, brokerage firm Nuvama Alternative & Quantitative Research has released a list of 78 probable stocks that could enter the F&O segment if they meet the proposed criteria.
ETMarkets.comProminent names in the list of candidates include Zomato, , Jio Financial, NHPC, Adani Green, IRFC, Varun Beverages, BSE, , DMart, Bank of India, Titagarh Rail, HUDCO, Sterling & Wilson Solar, etc.
At the same time, stocks that could face removal from the F&O segment if the proposed criteria are implemented with base case changes in any one of the criteria are Abbott India, Bata India, United Breweries, Torrent Pharma, MGL, etc.
In the consultation paper, Sebi has sought comments and inputs from all stakeholders on updating the selection criteria for entry and exit of stocks in the derivatives .
"Without sufficient depth in the underlying cash market and appropriate position limits around leveraged derivatives, there can be higher risks of market manipulation, increased volatility, and compromised investor protection. Given all this, there is a need for SEBI to ensure that only high quality stocks in terms of size, liquidity, and market depth are available in the derivatives segment," Sebi said.
Source: Stocks-Markets-Economic Times
