look news india
Ahmedabad: The Securities and Exchange Board of India (SEBI) may soon announce stricter rules for derivatives trading. The move by the market regulator is aimed at curbing speculative trading activities that have led to retail investors losing over Rs 50,000 crore.
The market regulator suggested seven steps in a consultation paper issued in July based on feedback from industry participants. These could be implemented with minor changes in Sebi's next board meeting, three sources familiar with the matter said.
According to sources, the regulator also has a provision to issue final norms without presenting the proposals before the board for approval. Another source said the regulator wants to put in place a safety net as soon as possible in the interest of retail investors, who often lose money in this sector.
SEBI has received suggestions to take steps, set eligibility criteria for traders and simplify rules related to high margin requirement and position limits. SEBI's consultation paper received responses from over 6,000 organizations, including the general public and key stakeholders, by the deadline of August 20.
The key proposals of SEBI include limiting weekly options contracts to one index per exchange, higher margin requirement near trade settlement and increasing contract size. Along with this, the regulator has increased the minimum contract size from the current Rs. 5 lakh to Rs. 15-20 lakh has also been proposed. This can be extended further after six months of contract launch. These recommendations were based on the recommendations of an expert working group.
