Share Market Regulator SEBI Chairperson Madhavi Puri Buch has once again expressed concern over the Futures and Options (F&O) category. She has also expressed surprise as to why it is not being made a big issue despite 90 percent of investors incurring losses due to it. Citing a SEBI study, she has said that the country’s families participating in the F&O category are facing losses of up to Rs 60 thousand crores in a year.
In fact, the study has revealed that 90 percent of investors have incurred losses due to this trend. SEBI Chairperson says that to avoid such a huge loss, this amount could have been invested in IPOs, Mutual Funds or other investment products. SEBI has also issued a consultation paper regarding this in which ways have been suggested to limit this activity.
Index derivative rules to be tightened!
Buch said that even though the stock markets will get less charges due to less F&O, it will be beneficial for everyone in the long term. Meanwhile, to reduce the losses incurred by common investors due to futures and options trading, SEBI has proposed to tighten the rules of index derivatives and has talked about amending the minimum contract size in futures and options trading and making provision for upfront margin for option premium.
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Earlier, in the Economic Review Report 2023-24, concerns were raised over the increasing interest of retail investors in the derivatives segment. According to the Economic Survey, there is no place for speculative trading in a developing country.
SEBI issued consultation paper
In its consultation paper, SEBI has proposed measures such as rationalizing weekly index products, monitoring the range of deals during day trading, making prices reasonable, removing calendar spread benefits on the day of settlement of F&O trades and increasing the near contract expiry margin. SEBI has sought suggestions from the public on these proposals by August 20.
Source (PTI) (NDTV) (HINDUSTANTIMES)