The Securities and Exchange Board of India (Sebi) has allowed market-making in illiquid equity derivatives, Livemint reports. Various brokers as well as the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have accepted the guidelines for “boosting liquidity” in illiquid derivatives. The regulator has allowed stock exchanges to design their own schemes to incentivize market-makers as long as they disclose the terms of such programs and also permitted exchanges to offer fee discounts, adjustments in fees in other segments, cash payments and shareholding in the stock exchange to a market-maker. Sebi has also permitted market-making for futures and options in new listings or in securities where the average turnover is less than 0.1% of market capitalization.

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