BSE stock surged 7% due to the Indian Securities and Exchange Commission (SEBI) crackdown on the F&O disturbance

The stock price of BSE Limited skyrocketed by 7% in trading on 7/31, the day after the Indian Securities and Exchange Commission (SEBI) proposed partial changes to futures and options transactions (F&O).

At 10:05 a.m., BSE shares were traded at 2,571.75 rupees on NSE. The trading volume on the exchange was 12,000 shares, which exceeded the monthly average daily trading volume of 10,000 shares.

Measures proposed by market regulators include rationalization of option strikes, collection of advance payment of option premiums from buyers, abolition of calendar spread preferential treatment when they expire, intraday monitoring of position limits, expansion of contract sizes by nearly 4 times, rationalization of weekly index products, and raising margins close to contract expiration.

The market regulator said these measures are aimed at strengthening the index derivatives framework to increase investor protection and market stability.

Securities company Jeffries believes that SEBI's new rule draft will directly affect approximately 35% of F&O transaction volume, and will have a big impact on exchanges and retail-centered brokers due to the tightness of the derivatives market.

As for BSE, it is predicted that there is a possibility that EPS for the 25-27 fiscal year will decrease by 7-9% due to the abolition of Bankex's weekly schedule. However, Jefferies also suggests that if profits from the spillover of trading activity from discontinued products offset BSE's impact on EPS and SEBI measures have a moderate impact on the industry as a whole, there is a possibility that EPS upgrades will be promoted.