SEBI’s volatility steps extended till July 30

The measures taken by the Securities and Exchange Board of India (SEBI) in March to address the heightened volatility in the markets on the back of COVID-19 pandemic have been extended until July 30.

“On review of the COVID-19 pandemic related situation, it has been decided that the regulatory measures introduced… dated March 20, 2020, shall continue to be in force till July 30, 2020,” SEBI said in a release on Thursday.

In March, the watchdog had increased the margins in the cash segment while tightening the norms for position limits in the derivatives market as volatility continued to rise in the stock market on account of the pandemic.

As part of the measures, the market wide position limit in certain stocks in the derivatives segment was revised to 50% and the penalty on an entity found to exceed the permissible limits was enhanced to 10 times of the current minimum and five times of the maximum penalty structure.

Meanwhile, foreign portfolio investors (FPIs) and mutual funds, among others, were allowed to take short positions in index derivatives only to the extent of the notional value of their holding in the underlying stocks.

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