The Securities and Exchange Board of India (SEBI) has introduced a framework to monitor intra-day positions in equity index derivatives to reduce risks from oversized exposures and maintain market liquidity and order.

SEBI has decided to impose clear intra-day position limits for each entity trading, with net intra-day position limited to Rs 5,000 crore per entity calculated on a futures-equivalent basis, an official notice said.

The gross intra-day position will be capped at Rs 10,000 crore, a level that mirrors the existing end-of-day gross limit.

The new rules will take effect on October 1, amidst rising concerns about participants taking large positions, especially on options expiry days, which created volatility and threatened market integrity.

Further, SEBI is exercising extra caution after the alleged manipulation incident involving the Jane Street Group.

Stock exchanges must monitor positions by taking at least four random snapshots during the trading session and one of these checks must occur between 2:45 PM and 3:30 PM, a period that often sees increased trading as positions are settled before the market closes, SEBI said.

SEBI has directed stock exchanges and clearing corporations to collaboratively develop a standard operating procedure for intraday monitoring and submit it within 15 days.

"For the entities breaching the aforesaid limits, stock exchanges shall examine trading patterns of such entities, and seek rationale for such positions from the clients, examining trading in the constituents of the index by the entity and discussing such instances with SEBI in the surveillance meeting," the statement read.

On expiry days, when speculative pressures are at their peak, violations will additionally attract penalties or surveillance deposits, to be determined jointly by the exchanges, it noted. Penalty provisions for expiry-day breaches will begin on December 6, 2025, coinciding with the end of the glide path for position limits.