Stories
Jefferies Expects Trading Volumes to Recover From December as Settlement Rules Ease
- •Jefferies predicts a recovery in trading activity starting December due to easing pressure from new expiry-day settlement rules.
- •The shift from closing auction session prices to volume-weighted average price aims to reduce options trading uncertainty.
- •Brokerage order volumes dropped 10 to 15 percent sequentially in August and September following regulatory changes.
- •Jefferies favors brokerages within the capital markets sector, followed by commodity hedge businesses and RTAs.
- •Brokers have tightened lending norms and adjusted leverage limits for margin trading facilities after a market decline in March.
Key Questions Answered
Jefferies expects trading volumes for Indian brokerages to start improving from December onwards. This anticipated recovery is driven by changes to expiry-day settlement rules that are designed to ease pressure on brokerages.
Under SEBI's circular taking effect on December 7, 2026, the settlement value of expiring index and stock derivatives will be based on the underlying asset's volume-weighted average price (VWAP) during the last 30 minutes of continuous trading. This replaces the closing auction session (CAS) prices to address market uncertainty.
Jefferies continues to favour brokerage firms first, followed by businesses offering hedges against commodity-related risks. Registrar and transfer agents (RTAs) and asset management companies (AMCs) follow next in their preference order.
