The much-awaited overhaul of derivatives trading criteria didn’t form part of the 17-point agenda of Sebi’s latest board meeting. However, regulatory sources said the curbs—first proposed through a discussion paper in July—could be enacted by way of a circular “soon.”
The market regulator had proposed seven key measures to curb retail participation in index futures and options (F&O) to limit losses.
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A source familiar with the developments said the consultation paper floated was in the form of a draft circular and not draft regulation. As a result, Sebi’s post-board meeting 23-page press release was silent on it.
“The changes have not been ruled out. To assume that the proposals have failed to make it through Sebi board members would be an incorrect interpretation. Sebi has provisions that allow it to issue the changes through a circular. As it was a consultation paper that received significant interest and responses, the market regulator will hopefully consider some suggestions,” said a market player.
Market players, including the stock exchanges which will be impacted by the proposed changes, had submitted their suggestions on the higher entry barriers, limiting single benchmark per exchange for weekly expiry, and margin requirements.
The market regulator had received overwhelming responses to the proposals, and F&O traders have been on edge as the proposed changes take final shape.
In its board meeting held on Monday, the market regulator’s board—which has members from the Reserve Bank of India (RBI) and the government—gave the nod to several key decisions, including the overhaul of investment advisor regulations, faster rights issues, pro-rata and pari-passu rights of investors of Alternative Investment Funds (AIFs).
First Published: Oct 01 2024 | 5:08 PM IST
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