NSE dumps 50 stocks from futures trading list

The National Stock Exchange has dropped 50 stocks, including Jet Airways, from its futures and options segment as they could not fulfil the new criteria prescribed by the Securities and Exchange Board of India. It said that no new contracts of these stocks can be traded from next month after the expiry on 29 April. However, the existing contracts for April, May and June will continue to be traded until they expire.

SEBI had this week issued fresh F&O guidelines to exchanges and imposed strict norms with immediate effect. The move came following the sharp rise and fall in the Akruti City stock in which traders had allegedly rigged the price because of a low float.

As per the new guidelines, only the top 500 stocks based on average daily market capitalisation and average daily traded value in the last six months on a rolling basis will qualify for the segment.

Further, the NSE announced that the stocks' median quarter sigma order size (the average of the median buying and selling price) over the last six months should be not less than Rs5 lakh, and the market wide position limit should not be less than Rs100 crore.

A stock shall be excluded if these criteria are not fulfilled for consecutively three months. For an existing F&O stock, the continued eligibility criteria is that its market wide position limit should not be less than Rs60 crore and the stock's median quarter-sigma order size over the last six months should be not less than Rs2 lakh, the NSE has decided.

Even the market-wide position limit in the counter has been doubled to Rs 100 crore. MWPL is based on a mathematical formula devised by exchanges and the regulator.

Once the stock is excluded from the F&O list, it shall not be considered for re-inclusion for a period of one year.

Most of the 50 stocks dropped by the NSE had turned illiquid, increasing the possibility of price manipulation. Among the more prominent companies dropped from the list are 3i Infotech, Alok Industries, Amtek Auto, Aptech, Arvind, Balaji Telefilms, Ballarpur Industries, Bata India, Birla Corporation, Central Bank of India, Edelweiss Capital, Gateway Distriparks, Gitanjali Gems, Hindustan Oil Exploration, HCL Infosystems, IRB Infrastructure, Jet Airways, MindTree, MRF, NIIT, NDTV, S Kumar's Nationwide, TVS Motor, UTV Software and Wockhardt.

This year alone, NSE has removed a total of 68 stocks from the F&O segment, which is 26 per cent of the total number of stocks in the segment. After the removal of these 50 stocks, 184 scrips would remain in the segment.