Stock Broking Firms Fall As Sebi Tightens F&O Norms

Shares of a large number of stock broking firms declined on Thursday amid markets regulator Sebi tightening F&O framework to curb speculative trading.

SMC Global Securities tumbled 4.29 per cent, Aditya Birla Money dropped 3.50 per cent, 5paisa Capital went lower by 2.91 per cent, ICICI Securities dipped 2.38 per cent and IIFL Securities declined 2.16 per cent on the BSE. "New Sebi regulations for the F&O segment have raised concerns about reduced trading volumes in the broader market," said Vinod Nair, Head of Research, Geojit Financial Services.

To curb speculative trading, Sebi on Tuesday put in place a stricter framework for equity index derivatives by increasing the minimum contract size and mandating upfront collection of option premiums. Other measures announced by Sebi included intra-day monitoring of position limits, removal of calendar spread benefit on expiry day, rationalisation of weekly index derivatives and increased tail risk coverage.

These measures, aimed at protecting investors and maintaining market stability, particularly in the high-risk environment of index options trading on expiry days, will become effective in a phased manner starting November 20, Sebi said in a circular.