On September 1, 2025, India’s market regulator SEBI (Securities and Exchange Board of India) issued a new circular that significantly increases intraday trading limits. These revised norms will take effect from October 1, 2025. At first glance, this may look like an ordinary policy update. But a closer look raises a crucial question: Who is this move really designed to benefit?
The Jane Street Context
Earlier this year, SEBI imposed a massive ₹4843 crore penalty on the global trading firm Jane Street. Interestingly, the firm paid the fine immediately without challenging SEBI’s order in court. Instead, it focused on working with the regulator to shape rules in ways more convenient for its business model.
The logic is simple: rules are only a problem when they go against you. If they are written to align with your interests, you can continue operating freely without fear of violation. SEBI’s latest circular on intraday limits seems to fit this narrative.
What Has Changed?
- Intraday Net Position Limit:
Raised from ₹1,500 crore to ₹5,000 crore. - Intraday Gross Position Limit:
Increased to ₹10,000 crore. Traders can now simultaneously hold ₹10,000 crore on the long side and another ₹10,000 crore on the short side—within a single trading day.
Clearly, these thresholds are far beyond the reach of ordinary investors. This is a playing field designed for large institutional players—Jane Street being a prime example.
Who Will Monitor This?
The responsibility for monitoring these positions has been placed on the stock exchanges, BSE and NSE. However, here lies a major concern.
Instead of real-time monitoring, exchanges will only take four snapshots per day of traders’ positions. One of these snapshots will be captured between 2:45 PM and 3:30 PM, a period when open interest typically fluctuates dramatically.
This approach raises a fundamental question: Can periodic snapshots truly capture the speed and scale of intraday trading? Or is this just an illusion of oversight—a “cat guarding the milk” situation?
Additional Leverage
The circular also allows traders holding cash, shares, or government securities to take on additional intraday positions. This provision effectively hands institutional investors even greater leverage to expand their trading activity without immediate restrictions.
The Enforcement Clause
To be clear, penalties still exist for exceeding these limits. Exchanges can issue notices, review trading patterns, and even impose fines or demand additional deposits—especially if violations occur on expiry day.
But here’s the catch: enforcement only works if monitoring is effective. With the current snapshot system, violations may go undetected in real time, giving large traders ample room to maneuver.
What the Market Is Saying
Unsurprisingly, the circular has already had an impact. BSE’s stock price surged soon after the announcement, signaling market confidence that exchanges—and by extension, large traders—stand to gain from these relaxed rules.
Final Thoughts
SEBI’s new framework dramatically expands intraday trading capacity, but it does so in a way that primarily benefits large institutional players, not retail investors.
By raising limits to levels unreachable for common traders, relying on weak monitoring mechanisms, and enabling additional leverage against collateral, SEBI appears to have opened the door for big players to dominate intraday markets even more aggressively.
The real question is: Is this regulation strengthening market stability—or simply legitimizing the power of a few dominant firms?
