After new Sebi curbs, FPI derivatives' positions dwindle

Unsquared positions hit record low in July; some worry on liquidity getting hit in short term

The Securities and Exchange Board of India's (Sebi's) move to ban participatory note (p-note) subscribers from taking naked derivatives positions has led to a sharp drop in the active contracts held by foreign investors.

The number of active contracts, termed Open Interest, has dropped to a record low of 1.7 million, from 1.9 mn last month. Further, the short positions rolled over by foreign portfolio investors (FPIs) halved to 23 per cent during expiry of July series contracts on Thursday. Rollover is carrying forward of open positions from one series to another. This unwinding has also impacted overall market-wide rollovers, which