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Following the recommendations of the Secondary Market Advisory Committee, the SEBI determined to permit the Mutual funds to participate in the Derivatives market at par with Foreign Institutional Investors (FII). As a result the Mutual funds shall be treated at par with registered FII in respect of positions limits in Index futures, Index options, Stock options and Stock futures contracts.
The Mutual funds will be considered as the trading members like registered FIIs and the schemes of the Mutual funds will be treated as clients like sub-accounts of FIIs. This revised policy will be applicable to all new schemes which are yet to be launched and for existing schemes, the Mutual funds are require to acquire positive consent from the majority unit holders for participation in the Derivatives segment while at the same time allowing exit option to dissenting members without any load.