New Delhi, March 19 -- Mumbai: The market regulator may review its contentious proposal to introduce a gross limit for all clients trading in index options after receiving feedback against such a rule from several market participants, a person aware of the development said.

The Securities and Exchange Board of India's planned review comes after brokers, proprietary desks and institutional traders flagged risks of reduced market liquidity and higher trading costs in India's derivatives market if the rule is implemented.

The regulator recently proposed to change the way of calculating open interest (OI) and introduced a new gross limit for index options. Open interest refers to the outstanding or open derivatives positions of all particip...