As a surveillance measure SEBI has required the Exchanges to use the following stock’s selection criteria for allowing or including them in Futures & Options (F&O) category of the exchange, with immediate effect:
The eligibility criteria for inclusion of scrips in F&O segment shall be as under:
· The stock shall be chosen from amongst the top 500 stocks in terms of average daily market capitalization and average daily traded value in the previous six months on a rolling basis.
· The stock’s median quarter sigma order size over the last six months shall be not less than Rs. 5 lakhs.
· The market wide position limit (MWPL) in the stock shall not be less than Rs. 100 crores.
The criteria for exclusion of scrips in F&O segment shall be as under:
For an existing F&O stock, the continued eligibility criteria is that market wide position limit in the stock shall not be less than Rs. 60 crores and stock’s median quarter-sigma order size over the last six months shall be not less than Rs. 2 lakh. The stock shall be excluded if the above criteria is not fulfilled for consecutively three months.
Further, once the stock is excluded from the F&O list, it shall not be considered for re-inclusion for a period of one year.
In pursuance to these guidelines, following 50 stocks are getting excluded from F&O segment of NSE for new expiry months on expiry of existing contract months.
| Sr No | Symbol | Security |
| 1 | 3IINFOTECH | 3i Infotech Limited |
| 2 | ALOKTEXT | Alok Industries Limited |
| 3 | AMTEKAUTO | Amtek Auto Ltd |
| 4 | APTECHT | Aptech Limited |
| 5 | ARVIND | Arvind Limited |
| 6 | BALAJITELE | Balaji Telefilms Ltd. |
| 7 | BALLARPUR | Ballarpur Industries Limited |
| 8 | BATAINDIA | Bata India Ltd |
| 9 | BIRLACORPN | Birla Corporation Ltd |
| 10 | BOMDYEING | Bombay Dyeing & Mfg Co. Ltd |
| 11 | CENTRALBK | Central Bank of India |
| 12 | DCB | Development Credit Bank Limited |
| 13 | EDELWEISS | Edelweiss Capital Limited |
| 14 | ESCORTS | Escorts Ltd |
| 15 | EVERONN | Everonn Systems India Limited |
| 16 | GDL | Gateway Distriparks Limited |
| 17 | GITANJALI | Gitanjali Gems Limited |
| 18 | GNFC | Gujarat Narmada Valley Fertilizer Co. Ltd. |
| 19 | GUJALKALI | Gujarat Alkalies and Chemicals Ltd. |
| 20 | HAVELLS | Havells India Limited |
| 21 | HCL-INSYS | HCL Infosystems Ltd |
| 22 | HINDOILEXP | Hindustan Oil Exploration Co. Ltd |
| 23 | IRB | IRB Infrastructure Developers Limited |
| 24 | JETAIRWAYS | Jet Airways (India) Ltd. |
| 25 | JSL | JSL Limited |
| 26 | KESORAMIND | Kesoram Industries Ltd. |
| 27 | KSK | KSK Energy Ventures Limited |
| 28 | KTKBANK | The Karnataka Bank Limited |
| 29 | LAXMIMACH | Lakshmi Machine Works Ltd. |
| 30 | MAHLIFE | Mahindra Lifespace Developers Limited |
| 31 | MAHSEAMLES | Maharashtra Seamless Ltd |
| 32 | MINDTREE | MindTree Limited |
| 33 | MONNETISPA | Monnet Ispat Ltd |
| 34 | MRF | MRF Ltd. |
| 35 | NBVENTURES | Nava Bharat Ventures Limited |
| 36 | NDTV | New Delhi Television Limited |
| 37 | NETWORK18 | Network 18 Fincap Limited |
| 38 | NIITLTD | NIIT Limited |
| 39 | PENINLAND | Peninsula Land Limited |
| 40 | RAJESHEXPO | Rajesh Exports Ltd. |
| 41 | RIIL | Reliance Industrial Infrastructure Limited |
| 42 | SKUMARSYNF | S. Kumars Nationwide Ltd |
| 43 | SREINTFIN | SREI Infrastructure Finance Limited |
| 44 | SRF | SRF Ltd. |
| 45 | STAR | Strides Arcolab Limited |
| 46 | THERMAX | Thermax Ltd |
| 47 | TORNTPOWER | Torrent Power Limited |
| 48 | TVSMOTOR | TVS Motor Company Limited |
| 49 | UTVSOF | UTV Software Communications Limited |
| 50 | WOCKPHARMA | Wockhardt Limited |
However, the existing unexpired contracts for the month of April, May and June 2009 would continue to be available for trading till their respective expiry and new strikes would also be introduced in these existing contract months.
This is a welcome move, as, in many of the stocks now excluded, F&O segment is used as a platform to rig the price as there is no circuit filter in this segment. Also, in case of low public float and high promoters’ holding, it has become more easy for the players to rig up the price. Many of these stocks are having lower value in two digits, resulting in higher lot size coupled with huge intra-day volatility , which, a small trader is unable to face it but can’t refrain from trading in it.
However SEBI and exchanges should also think of increasing Market Wide Limit to around 50% of float as also to make F&O segment securities settled , instead of present system of cash settled , to make it more healthy, transparent and trader friendly as also to curb rampant speculative and momentum play in some of the stocks included in F&O segment.