Saturday, November 02, 2024
Home » Banking » Sebi set to tighten F&O rules to rein in speculative trading

Sebi set to tighten F&O rules to rein in speculative trading

October 4, 2024
Banking
0

Share

Markets regulator, Sebi is expected to take steps to rein in the retail frenzy in F&O trading in a board meeting on Sept 30. These decisions could include tightening of rules for the speculative futures & options segment of the market and stricter margining system. The Sebi board is also expected to give its nod for a ‘new asset class’ that was proposed by the regulator in July. It will serve as an investment product for rich investors that would be a hybrid product combining features of mutual fund plans and portfolio management schemes. This will be Sebi’s first board meeting since US-based short-seller Hindenburg came out with a report on Aug 11, alleging conflict of interest cases involving Sebi Chief, Madhabi Puri Buch and husband Dhaval Buch. Both have denied all allegations. The board may also allow a new set of regulations that’s aimed at passive-only fund houses since these tech-driven entities do not need to adhere to every stringent norm applicable to actively managed mutual funds.

On July 30, Sebi had floated a consultation paper on some changes that the regulator wanted to bring in in the equity F&O segment. Last month, Sebi Chief had said it had received more than 6,000 comments on the same. Among the changes Sebi had proposed is to allow only one index-based weekly contract on each derivatives exchange. The rule could rein in unabated speculative trading in the F&O segment but at the same time could be a drag on the turnover, revenue and hence profits of the exchanges that run these segments, top bourse officials had said. Speculative trading in the F&O segment has reached a level where, during the three-year period ending March 2024, only 7 out of 100 retail traders had made money, a recent Sebi study showed. Retail traders as a group lost a combined Rs 1.8 lakh crores during the study period, that is FY22 to FY24.

Related Posts

Reader / Viewer discretion and disclaimer :
The information provided on SMEConnect (www.smeconnect.in) website is intended for general informational purposes only. While we strive to provide accurate and up-to-date information, we cannot guarantee the accuracy, completeness, or reliability of the content. The views and opinions expressed in the articles and posts on this website are those of the authors and do not necessarily reflect the official policy or position of SMEConnect website. Readers are advised to independently verify any information found on this website before making decisions based on it. We do not endorse, represent, or warrant the accuracy or reliability of any third-party content linked on this site. Furthermore, SMEConnect (www.smeconnect.in) website shall not be held liable for any errors, omissions, or delays in the information provided, nor for any losses, injuries, or damages arising from its display or use. Please note that the content on SMEConnect (www.smeconnect.in) website may be subject to change without notice.