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Sebi unveils measures to tackle market volatility, curbs short selling

This article was posted on Mar 23, 2020 and is filed under Market News

The Securities and Exchange Board of India (Sebi) on Friday announced measures to control volatility in stocks. Curbs on short selling, a steep increase in margins, a 10-fold increase in penalties, and reducing the outstanding positions available for derivatives trading are some key changes the regulator announced.

Sebi has said the short positions in the derivatives market cannot exceed the value of the holdings of the underlying stocks or the collaterals provided by them.

An additional position limit of Rs 500 crore will be available for the futures and options (F&O) segment.

Market players said the move was to discourage traders from aggressively building short positions.

“There is a practical short-selling cap at Rs 500 crore that has been levied. If people want to speculate beyond the prescribed limit of Rs 500 crore, they will need to put up twice the margin, which will be blocked for three months,” said Jimeet Modi, founder and chief executive officer, Samco Securities.

For more visit: Business-Standard

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