look news india
Currently, the Securities and Exchange Board of India (SEBI) is in the process of tightening the guidelines for Futures and Options (F&O). The new amendment may include rules such as increased margin requirement, stricter eligibility criteria, disclosure of net worth to investors. The continuous shift of retail investors from the capital market to the derivatives market has necessitated new reforms for F&O by the market regulator.
The market regulator had written a letter to the Association of Mutual Funds in India (AMFI) in this regard last week. In which it was said to take feedback from the industry body on the existing guidelines for derivative trading. It was also asked to present its views on how the existing derivative trading rules can be tightened. Also, a committee has also been formed in this matter. In which brokerage firms, asset management companies have been included. From whom suggestions have been sought.
F&O Trading Articles
In the financial year 2018-19, the number of individual investors in the age group of 20 to 30 years in the F&O segment was only 11 percent. Which has increased to 36 percent in the financial year 2021-22.
Nearly 90 per cent of the total individual investors in the F&O equity segment suffered an average loss of Rs 1.1 lakh in FY 2021-22.
One per cent and five per cent of the active profit earners account for approximately 51 per cent and 75 per cent of the total net profits, respectively.
Of the individual investors in F&O, 98 per cent traded in options and only 11 per cent traded in futures.
Keep an eye on F&O volumes
The Reserve Bank of India and the market regulator are keeping a close watch on high-value trading in the futures and options segment, central bank governor Shaktikanta Das said, but denied any signs of overheating in financial markets. The two regulators discussed it under the aegis of the Financial Stability and Development Council (FSDC), Das said. Options and futures volumes are bigger than the country's GDP. We have discussed the matter with Sebi and they will take action on the situation.
