An expert panel of the Securities and Exchange Board of India (Sebi) will meet early next week to discuss various measures to lower risks in the equity derivatives market, said two people familiar with the development. “The only agenda of the secondary market advisory committee which is meeting on July 15, is to discuss these short-term measures for F&O segment,” said one of the persons.
A working group headed by former RBI executive director G Padmanabhan has discussed various proposals including limiting weekly options, increasing lot sizes of F&O contracts, enhancing margin requirements, upfront collection of option premium from buyers of options, and intra-day monitoring of position limits, the person said.
“The trend that we are seeing in the kind of trades that is happening like concentrated in weekly auctions, only on expiry day, in the last one hour. These are just speculative bets. These have no nature of hedging, these have no other nature other than speculation. The question is now that what is it that needs to be done further from an investor protection perspective,” Sebi chairperson Madhabi Puri Buch had said in a recent interaction with media.
According to Sebi data, the overall derivative turnover was ₹210 lakh crore in FY18, which jumped to ₹500 lakh crore in FY24, she said, adding that individual investors in index options trade jumped to 41% in FY24 from 2% in FY18.
