The Securities and Exchange Board of India (SEBI) has introduced new monitoring guidelines for intraday position limits in index derivatives, effective April 1, 2025. Additionally, SEBI has streamlined the follow-on offer (FPO) process for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to enhance capital-raising efficiency.
SEBI’s Intraday Monitoring of Index Derivatives
Key Changes Effective from April 1, 2025:
- Stock exchanges must monitor existing position limits for index derivatives on an intraday basis.
- Minimum of four snapshots of market positions must be taken randomly during trading hours.
- Exchanges may increase the number of snapshots, but at least four are mandatory.
- No penalties will be imposed on intraday breaches until further notice.
Reason for Implementation:
- Market participants, including brokers and traders, raised concerns about technical readiness for real-time monitoring.
- SEBI is transitioning towards a delta-based or futures-equivalent limit framework, as proposed in its February 2025 consultation paper.
- This ensures smooth adaptation while reducing the burden on market infrastructure.
Proposed New Position Limits for Index Derivatives:
| Instrument | End-of-Day Limit | Intra-Day Limit |
| Index Options | ₹500 crore (Net) / ₹1,500 crore (Gross) | ₹1,000 crore (Net) / ₹2,500 crore (Gross) |
| Index Futures | ₹1,500 crore (Earlier ₹500 crore) | ₹2,500 crore |
- Applies to all market participants – Foreign Portfolio Investors (FPIs), Mutual Funds, traders, and retail clients.
Expected Benefits:
- Enhanced risk management and transparency in Futures & Options (F&O) trading.
- Market participants can make better-informed trading decisions.
- Minimizes disruptions while transitioning to a new monitoring framework.
SEBI’s Fast-Track FPO Framework for REITs & InvITs
Key Features:
Sponsors receiving preferential units in a REIT/InvIT FPO must adhere to lock-in periods:
- 15% of allotted units locked in for 3 years.
- Remaining units locked in for 1 year.
- Inter-group transfer guidelines introduced for REITs and InvITs.
- New FPO rules take effect immediately, covering listing approvals, offer documents, and public unit holding requirements.
Process for REITs & InvITs to Raise Funds via FPO:
- Obtain in-principle approval from stock exchanges where units are listed.
- File necessary documents with SEBI post-merchant banker approval.
- Follow SEBI’s guidelines for minimum public unit holdings and disclosures.
Expected Benefits:
- Faster access to capital for REITs/InvITs, promoting infrastructure growth.
- Increased investor confidence through a structured and transparent process.
- Stronger regulatory framework for sponsor unit allocations and market participation.