Sebi proposes to fix circuit filters on F&O scrips

Capital market, SEBI, securities, derivatives, options, market, futures, stock, bonds

Capital markets regulator Sebi on Monday proposed to fix circuit filters or price bands on futures & options (F&O) scrips to curb excessive volatility.

In a discussion paper on “Applicability of Individual Scrip wise Price Bands or Circuit Filters” on F&O scrips, Sebi said: “Concerns have been raised that investors’ wealth is getting wiped out in a single day by recent falls in stocks on which derivative products are available, as no price bands or circuit filters are applicable on them.”

“In view of recent abnormal intra-day price movements, suggestions are being made to review the rules to prevent such extraordinary price movements.”

Derivatives markets reflect the expectation of spot prices in the future, and as such price bands or circuit, filters are generally not applied to them.