FM Sitharaman cautions 'unchecked explosion' in retail F&O trading could create future challenges

FM Sitharaman says 'unchecked explosion' in retail F&O trading could create future challenges

Union Finance Minister Nirmala Sitharaman appealed to decision makers at NSE and BSE to work closely with market regulator SEBI to create a stringent regulatory standard. She was speaking at the "Vision for Indian Finance Markets" event at BSE in Mumbai.

Any unchecked explosion in retail trading of futures and options (F&O), she warned, could create future challenges not just for markets, but for investor sentiment and household finances.

"I would appeal to the BSE that you should work closely with Sebi in order to ensure stringent compliance and regulatory standard so that investor confidence grows further.," the Minister said.

Sitharaman also spoke about the active role that household finances and participation from middle class investors has been playing in protecting the market from fluctuations. Hence, she said that there is a need to protect the investors and their contributions. "Household finances have made a generational shift, we want to safeguard that, we want to ensure that it is not going to be shattered."

Talking about the role of BSE and NSE, Sitharaman noted that the stock exchanges should ensure market stability and  mitigate systemic risks. She appealed to the exchange members to find ways to leverage technology, and adopt blockchain, artificial intelligence, along with big data to improve efficiency and transparency.

On the importance of the capital markets, Sitharaman had said that without capital, one cannot expect to see efficiency and production happening in the country. "Financial markets play a very very crucial role for not just capital mobilisation but also for capital allocation and the seamless way in which capital flows into places from where productivity can improve," she said.

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