India’s markets regulator, the Securities and Exchange Board of India (SEBI), has proposed capping intraday equity index derivatives net positions at ₹1,500 crore (about $172 million) after concerns of manipulative trading strategies, particularly following the Jane Street case. The proposal, reviewed in New Delhi on August 21, 2025, is aimed at protecting retail investors and ensuring market stability.
The Securities and Exchange Board of India (SEBI), the country’s market regulator responsible for overseeing and regulating securities and commodities markets, has proposed a new cap on intraday equity index derivatives positions to strengthen market integrity.
A high-level panel of SEBI has recommended limiting an entity’s intraday net position in equity index derivatives to ₹1,500 crore (around $172 million). The proposal comes after concerns over excessive speculative trading and manipulative strategies that have led to retail investor losses.
The development follows SEBI’s earlier action against U.S.-based high-frequency trading firm Jane Street, which was temporarily banned from Indian markets for allegedly engaging in manipulative trades. This case prompted regulators to revisit intraday trading limits to safeguard investors.
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The recommendation was reviewed during a meeting of SEBI’s Secondary Market Advisory Committee in New Delhi and has been forwarded to the regulator’s board for approval. Currently, an entity’s end-of-day net position is capped at ₹15,000 crore, while gross positions are limited to ₹1,00,000 crore.
According to sources, the proposed ₹1,500 crore intraday limit is designed to prevent situations where intraday trading positions surpass regulatory limits, particularly on derivatives expiry days. The move is expected to provide exchanges with a clear threshold for initiating penalties and reporting breaches.
The panel has also suggested stricter rules for tracking trading activity of foreign entities operating through intermediaries. Exchanges will be responsible for monitoring, levying penalties, and reporting violations directly to SEBI.
If approved, the new framework will mark a significant shift in India’s derivatives market, aiming to reduce volatility while balancing institutional and retail interests.
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