20 hours Ago By Charu Singh
The Securities and Exchange Board of India is actively working on fine-tuning the regulations related to derivatives market, in order to ensure that they do not stifle market activity while protecting retail investors, said Tuhin Kanta Pandey, the chairman of the market regulator.Pandey, in an interactive chat with NDTV Profit, shed light on the recent SEBI proposals regarding changes in risk disclosure and data comparison, saying that they were part of a broader effort to improve the market's structure and mitigate undue risk for retail investors. "We are continuously reviewing the market, gathering feedback, and we are ready to make adjustments where necessary," Pandey affirmed.
He mentioned that SEBI has received over 800 public comments in response to its consultation paper on F&O regulation. These comments are being carefully reviewed, and a final decision on the proposed measures will be made soon.The SEBI chairperson clarified that the measures being considered around the futures & options segment are part of a holistic regulatory approach and not intended to unduly control or clamp down on the market.
He emphasised that SEBI is not targeting the options market specifically but is looking at the broader picture to ensure investor protection and market integrity.Pandey underlined that the overall aim is to strike a balance between regulation and market freedom. The idea is to address risks and inefficiencies without disrupting the functioning or growth of the market.
Importantly, he noted that many of the proposed changes do not require a board meeting and can be implemented administratively. As a result, SEBI can move forward with the decisions relatively quickly.SEBI Chairman Stresses Merchant Banker Role In SME IPO OversightSEBI's Approach For F&OOn Feb.
25, the market regulator proposed a shift to a ‘Future Equivalent’ method of calculating open interest in the equity derivatives market. This is being suggested in place of a notional value-based method of calculating IO, to prevent the stocks from being manipulated and pushed into a ban period. The market regulator has also suggested changes regarding the market-wide position limits or MWPL, which decide how much trading can take place in a stock.
Currently, it is set at 20% of a stock’s free-float market capitalisation. SEBI is proposing a new formula where MWPL will be the lower of 15% of free-float market capitalisation or 60 times the average daily delivery value (ADDV) in the cash market.Prior to this, last year, SEBI had come out with several curbs on F& O trading in order to control volumes and had also released a report mentioning that nine out of ten investors in this segment were facing losses.
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