NSE bans derivatives trading for 9 companies: PNB, Bandhan Bank included

NSE clarified that derivative contracts for these companies crossed the 95% market-wide position limit (MWPL), leading to the restriction. This limit indicates excessive speculative activity in the futures and options (F&O) segment, resulting in their inclusion in the F&O ban list. The ban, initially imposed on January 24, was extended due to their failure to reduce open positions in their shares.

During the ban, traders are prohibited from opening new positions in futures and options contracts for the listed stocks. However, they can trade to reduce existing positions. Any attempt to increase open positions will lead to penalties and potential disciplinary action under NSE's regulations.

The Securities and Exchange Board of India (SEBI) has issued clear guidelines for managing such situations. The NSE's decision aligns with these regulatory measures to safeguard market integrity and ensure compliance. Traders violating the ban rules will face severe consequences, including monetary penalties and further disciplinary action.

This development comes amid a volatile phase in the stock market, with key indices like BSE Sensex and NSE Nifty ending lower on January 24. The ban exemplifies the regulatory body's proactive approach to managing market risks and protecting investor interests.

The NSE has imposed a one-day ban on derivatives trading for nine major companies, including Punjab National Bank, Bandhan Bank, L&T Finance, and Aditya Birla Fashion. Can Fin Homes, Dixon Technologies, Indiamart Intermesh, Manappuram Finance, and Mahanagar Gas are the other affected companies. The ban will be effective from January 27, but trading in the cash market for these companies will remain unaffected during this period.