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SEBI plans new rules for Options Trading

Securities and Exchange Board of India (SEBI) has proposed a new system for option strike prices to make trading more flexible and easier during sharp market movements.

The market regulator wants to introduce a dynamic framework that would allow option strike prices to adjust according to changing market conditions. The move is aimed at ensuring traders have access to more suitable price levels when markets move quickly.

Currently, option strike prices are introduced based on existing exchange rules. However, during periods of high volatility, traders can sometimes face difficulties if available strike prices do not match rapidly changing market conditions.

SEBI believes a more flexible system could help maintain smooth trading and improve the overall experience for market participants. The proposal is also expected to support better risk management and provide traders with more choices.

Options are widely used by traders and investors to manage risk and make market bets. The strike price is an important part of these contracts because it determines the level at which buying or selling can take place.

Market experts say the proposed changes could make options trading more efficient, especially during periods of sudden market movement. A wider range of relevant strike prices could help traders react more effectively to changing situations.

SEBI has invited comments and suggestions from stakeholders before taking a final decision on the proposal.

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BofA pays ₹58.5 lakh to close SEBI case

Bank of America’s (BofA) securities arm in India has settled an insider trading-related case with the Securities and Exchange Board of India (SEBI) by paying a settlement amount of ₹58.5 lakh.

The case was linked to alleged lapses in complying with insider trading regulations, particularly the failure to properly maintain a Structured Digital Database (SDD), which is required to track access to unpublished price-sensitive information.

SEBI had issued a show-cause notice to the firm last year, alleging violations of insider trading and merchant banking rules. The regulator said the database is a key compliance tool designed to prevent misuse of confidential market information.

During the proceedings, the company filed a settlement application without admitting or denying the allegations. The matter was reviewed by SEBI’s internal committees and later approved for settlement.

The regulator confirmed that after payment of the ₹58.5 lakh fee, the case has been disposed of.

The settlement brings closure to the proceedings, though SEBI retains the right to take action in future if any misrepresentation or non-compliance is found.

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RBI, IRDAI cautious on banks in commodity derivatives

India’s financial regulators have taken a cautious stance on allowing banks and insurance companies to participate in commodity derivatives trading, according to remarks made by SEBI chief Tuhin Kanta Pandey.

Pandey said that both the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (IRDAI) are currently not inclined to permit such participation due to risk and structural concerns. As a result, banks and insurers are expected to remain out of the commodity derivatives segment for now.

The clarification comes even as the Securities and Exchange Board of India (SEBI) had earlier explored expanding participation in the commodities market to deepen liquidity and improve price discovery. SEBI had also discussed allowing banks and pension funds to enter the segment as part of efforts to strengthen the ecosystem.

However, the latest stance from the RBI and IRDAI indicates that the proposal has hit a regulatory roadblock. Officials believe commodity-linked instruments may not align with the long-term investment mandates of banks and insurance companies, and could expose them to additional volatility risks.

Following the remarks, market sentiment turned negative for commodity exchanges. Shares of Multi Commodity Exchange of India (MCX) fell by around 3–3.5%, reflecting concerns that reduced institutional participation could limit liquidity and trading volumes.

MCX, which dominates India’s commodity derivatives market, is particularly sensitive to regulatory changes affecting institutional access. Investors worry that without banks and insurers, the growth potential of the segment could be constrained in the near term.

At the same time, SEBI’s broader agenda to develop the commodity market remains in focus, including earlier proposals to involve pension funds and other long-term investors. But regulatory alignment between the three major bodies, SEBI, RBI, and IRDAI, appears to be the key hurdle.

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SEBI proposes overhaul of stockbrokers’ net worth norms

The Securities and Exchange Board of India (SEBI) has proposed a major revision in how stockbrokers calculate their “variable net worth”, shifting from a fixed formula to a more risk-based system that reflects their actual business size and exposure.

Under the current rule, brokers are required to maintain net worth linked to 10% of the average daily client cash balance they hold. However, SEBI says this method has become outdated after changes in how client funds are handled in the market. With the introduction of the upstreaming mechanism, client money is now transferred to clearing corporations, leaving brokers with very little cash on their books.

Because of this shift, SEBI believes the old calculation no longer accurately reflects the risks brokers face. The regulator has now proposed a new framework that ties capital requirements more closely to both client exposure and business scale.

In the new model, one key component of net worth will be based on 10% of the average credit balance of clients over the past six months. This replaces the earlier focus on funds retained by brokers.

The second component is linked to the number of active clients. Brokers will need to maintain additional capital in slabs depending on their client base. For example, firms with more clients will be required to hold higher minimum net worth, with incremental increases as their customer base grows. Separate requirements are also proposed for clients brought in through authorised persons.

SEBI has said the net worth requirement acts as a “second line of defence” after margin obligations and must be strong enough to absorb risks not covered elsewhere.

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SEBI eases IPO rules, plans checks on trading errors

Securities and Exchange Board of India (SEBI) has taken steps to make life easier for companies planning to go public, while also trying to make stock market trading safer.

In a recent move, SEBI has allowed companies to reduce the size of their IPOs by up to 50% without going through a long and complex approval process. Earlier, companies could only make smaller changes without restarting paperwork.

This change comes at a time when global uncertainties, including tensions involving Iran, have made markets unpredictable. Because of this, many companies have been cautious about raising funds, as investor sentiment has weakened.

With the new rule, companies can now adjust their IPO plans more easily if market conditions are not favourable. However, they still need SEBI’s approval, and the purpose of the IPO must remain the same. The relaxation is temporary and applies to companies planning to launch IPOs in the coming months.

At the same time, SEBI is also focusing on making trading more secure. It is looking to reduce “fat finger” errors, mistakes made when traders accidentally enter the wrong price or quantity.

To address this, SEBI may ask stock exchanges to introduce tighter and more flexible price limits in the options trading segment. These limits would help prevent sudden spikes or crashes caused by such errors.

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Sebi to review FPI rules, settlement changes

Securities and Exchange Board of India (Sebi) is set to discuss key reforms aimed at making trading easier for foreign investors and improving overall market efficiency.

At its upcoming board meeting, Sebi will consider a proposal to simplify settlement rules for foreign portfolio investors (FPIs). At present, FPIs must settle each transaction separately, even if they buy and sell shares on the same day. This often requires them to arrange large amounts of funds for multiple trades.

The proposed change would allow a “net settlement” system, where investors can offset their buy and sell positions within the same trading cycle. This means they would only need to pay or receive the net difference, reducing the need for excess funds and lowering transaction costs.

Experts say this move could ease liquidity pressure on foreign investors, especially during periods of high trading activity such as index rebalancing. It may also help cut foreign exchange costs that arise due to timing differences between inflows and outflows.

Alongside this, Sebi will also review rules related to market intermediaries, including brokers and other financial entities. The board is expected to examine governance norms and eligibility criteria, often referred to as “fit and proper” rules, to ensure stronger oversight and accountability.

These proposals are part of Sebi’s ongoing efforts to make India’s capital markets more investor-friendly while maintaining safeguards for transparency and risk management. Simplifying processes for FPIs is seen as an important step in attracting more global investment into Indian markets.

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Manipal Hospitals plans ₹11,000 cr IPO

Manipal Hospitals, one of India’s leading private healthcare chains, is preparing to launch a massive initial public offering (IPO) worth ₹11,000 crore, making it the largest healthcare listing in the country. The hospital group is expected to file its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) soon, setting the stage for its stock market debut.

The IPO will comprise both a fresh issue of shares and an offer-for-sale (OFS) by existing shareholders. Around ₹2,000 crore is likely to come from the OFS portion, while the remainder will be raised through new shares. Proceeds from the issue will be used primarily to repay debt of approximately ₹8,000 crore, reducing interest obligations and improving the company’s balance sheet. Additional funds will support strategic expansion, including potential acquisitions and growth of existing facilities.

Over the past few years, Manipal Hospitals has expanded aggressively, acquiring stakes in hospitals such as AMRI Hospitals in Kolkata and other regional facilities, growing its network to nearly 50 hospitals nationwide. The chain has become one of the largest hospital networks in India in terms of bed capacity and geographical presence, offering multi-specialty care across urban and semi-urban areas.

The IPO, led by Kotak Mahindra Bank, is expected to attract strong investor interest, reflecting both the robust growth prospects of private healthcare in India and the rising demand for quality medical services. Analysts say the listing marks a milestone in the consolidation of India’s healthcare sector, as private hospital chains increasingly look to the stock market to raise funds for expansion and debt management.

This move comes at a time when India’s healthcare industry is witnessing heightened investor activity, with private hospitals leveraging capital markets to strengthen operations and fund acquisitions. Manipal Hospitals’ IPO is not just a financial event but a signal of confidence in the long-term growth of India’s healthcare infrastructure, positioning the chain for sustained expansion and improved financial stability.

The company has yet to confirm the IPO timeline, but market watchers anticipate it to be a landmark offering, setting a benchmark for future healthcare listings in India.

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SEBI halts NCDEX, MSE from equity derivatives launch

The Securities and Exchange Board of India (SEBI) has paused plans by the National Commodity and Derivatives Exchange (NCDEX) and the Metropolitan Stock Exchange (MSE) to offer equity derivatives. The move is part of the regulator’s effort to ensure that new exchanges first develop strong and liquid cash equity markets before venturing into derivatives trading.

Both NCDEX and MSE had applied to enter the equity market last year, seeking approval to list shares and launch options and futures contracts. SEBI, however, has told them to focus on building a robust cash market first. Officials indicated that the regulator wants these exchanges to demonstrate sufficient liquidity, price discovery, and trading activity in cash equities before allowing more complex derivatives products.

Both exchanges have been preparing for this expansion. NCDEX raised around ₹770 crore from domestic and foreign investors, aiming to diversify beyond agricultural commodity contracts. MSE secured roughly ₹1,200 crore from private equity and brokerage backers to strengthen its technology platform and infrastructure. Despite these efforts, SEBI wants them to prove their readiness in cash equities first.

The regulator has also emphasized technology upgrades as a prerequisite for derivatives trading, underscoring the importance of market stability and investor protection. This move comes amid increasing caution around derivatives, following recent government steps such as raising Securities Transaction Tax (STT) on futures and options to curb excessive speculation.

Sources say SEBI prefers a gap of at least six months between starting cash trading and offering derivatives. The decision reflects broader concerns in the Indian market, where derivatives trading is already nearly double the size of the underlying cash equity market, a figure much higher than international standards.

SEBI’s directive signals that while new players are welcome, they must first ensure a solid foundation in the cash segment before entering the fast-moving derivatives market. For now, established exchanges like the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) remain the primary platforms for equity and derivatives trading.

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SEBI rules out immediate futures and options curbs

The Securities and Exchange Board of India (SEBI) has said it will not make any immediate changes to the futures and options (F&O) market, despite the recent increase in Securities Transaction Tax (STT) on derivatives. SEBI Chairman Tuhin Kanta Pandey clarified that the regulator is not planning any new restrictions or banning weekly F&O contracts at this time.

The 2026 Union Budget had raised the STT on futures from 0.02% to 0.05% and increased the tax on options premiums to 0.15%. The move was aimed at reducing speculative trading and protecting small investors. Some in the market had expected SEBI to take further action following the hike.

Pandey reassured investors that SEBI prefers a careful and data-driven approach. He specifically said there is no plan to ban weekly expiry F&O contracts, and the current rules will remain in place for now.

Following SEBI’s statement, market sentiment improved. The Nifty Capital Markets index and shares of firms like MCX and Angel One went up, while the broader market also recovered from earlier losses.

SEBI’s position shows its focus on market stability. Instead of acting immediately, the regulator plans to study market trends and consult stakeholders before considering any changes. This approach is aimed at protecting investors while maintaining a healthy derivatives market.

Investors welcomed SEBI’s cautious stance, as it ensures no sudden restrictions will disrupt trading. The regulator appears committed to balancing investor protection with market growth, taking decisions only after thorough review.

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NSE receives SEBI approval for IPO launch

The National Stock Exchange of India (NSE) has finally received approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO), ending almost ten years of delays. This clearance allows the exchange to submit its draft prospectus and move toward listing, a significant milestone for India’s capital markets.

NSE first filed for an IPO in 2016, but its plans were stalled amid regulatory scrutiny and legal challenges. The exchange faced allegations regarding co-location facilities and dark fibre services, which reportedly gave select brokers faster access to trading data. Over the years, these issues delayed NSE’s path to listing, even as other Indian exchanges, like BSE, successfully went public.

The recent SEBI approval follows settlement applications submitted by NSE to resolve these long-standing cases. Officials from the regulator had indicated that the NOC would likely be granted after these matters were addressed. With the nod now in hand, NSE is expected to submit the IPO draft prospectus by end of March 2026, with the listing process projected to take six to eight months, potentially making NSE a publicly listed company by late 2026.

Unlike conventional IPOs, NSE’s offering is expected to be an offer-for-sale (OFS). Existing shareholders, including LIC, SBI, and other financial institutions, will sell part of their holdings to the public, meaning the exchange itself will not raise fresh capital from the IPO. This approach allows existing investors to realize part of their gains while introducing NSE shares to retail and institutional investors.

NSE chairperson Srinivas Injeti described SEBI’s approval as “a significant milestone in our growth journey,” highlighting the exchange’s commitment to transparency and market development. Market experts say the IPO will not only enhance NSE’s public profile but also boost investor confidence in India’s capital markets.

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