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TMI BlogReview of eligibility criteria for entry/exit of stocks in derivatives segment.X X X X Extracts X X X X X X X X Extracts X X X X ..... e securities market while being mindful of these concerns, SEBI vide section 3.1.2 of Chapter 5 of Master Circular on Stock Exchanges and Clearing Corporations, dated October 16, 2023 , has, inter-alia, laid down the eligibility criteria for entry/exit of stocks in derivatives segment. 1.3. Given the need to ensure that only high quality stocks with sufficient market depth are allowed to trade in derivatives segment and considering the growth witnessed in market parameters since the last review conducted in 2018, the eligibility criteria for entry/exit of stocks in derivatives segment has been revised as under. 2. Entry Norms for stocks in derivatives segment 2.1. The stocks meeting the below stated eligibility criteria, based on performanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all stock exchanges. The stock exchanges shall settle the derivative contracts at a price calculated by the clearing corporations based on volume weighted average price (VWAP) from the cash segment across all exchanges. 2.3. In addition, other aspects, such as, any surveillance concerns, ongoing investigations, or other administrative considerations shall be taken into account by SEBI, while considering a stock for introduction into derivatives segment. 3. Exit norms based on performance in underlying cash market 3.1. If a stock in derivatives segment fails to meet any of the above criteria, as mentioned at Table-1 above, for a continuous period of three months, on a rolling basis, based on the data for previous six months, then it shall e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 4.1. On similar lines as the extant PSF for index derivatives, it has been decided to introduce additional exit criteria for stocks from the derivatives segment, by introducing PSF for single stock derivatives also. The criteria for the said PSF framework is as follows. 4.1.1. At least 15% of trading members active in all stock derivatives (trading member who has traded during the month) or 200 trading members, whichever is lower, shall have traded in any derivative contract on the stock being reviewed on an average on monthly basis during the review period, 4.1.2. Trading on a minimum of 75% of the trading days during the review period, 4.1.3. Average daily turnover (futures + options premium) of at least INR 75 crores during the review ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of entry and exit norms based on performance in underlying cash market i.e. all the above criteria for PSF shall be calculated on the 15th of each month, on a rolling basis, considering the data for previous six months. 4.7. A stock will exit from derivatives segment if it fails to meet the PSF criteria on all the exchanges. If a stock is meeting the PSF criteria on any exchange, it will continue to be eligible for derivatives segment on all exchanges. 5. Illustrations on exit timelines of stocks under various scenarios are placed below: 5.1. Exit norm based on performance of the underlying Table-2 Existing stock as on date Gestation period Exit timeline September 15, 2024 3 months for applicability of exit criteria, aligned with the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned with the review cycle Review conducted on Jun XX 2025 (past 6 months rolling data for the period ending 15-Apr-2025,15-May-2025 and 15-Jun-2025) 6. All other provisions mentioned in Master Circular No. SEBI/HO/MRD2/PoD-2/CIR/P/2023/171 dated October 16, 2023 , shall continue to be applicable 7. The Stock exchanges are directed to: 7.1. Make amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision, as may be applicable/necessary; 7.2. Carry out system changes, if any, to implement the above; 7.3. Disseminate the provisions of this circular on their website; 7.4. Communicate to SEBI, the status of implementation of provisions of this circular. 8. The circular would be effective from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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