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No more actions on derivatives on anvil: Sebi's Ananth Narayan

Sebi is also looking at the question of having indices with futures and options with very high concentrated weightages of some specific stocks from a perspective of ensuring trust in the system, Narayan added

January 11, 2025 / 17:27 IST
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Making it clear that Sebi has nothing against derivatives and that they help in price discovery and deepening the market, Narayan assured that the tweaks will be introduced only after consultations.

The capital markets regulator is not planning any more measures to curb or restrict activity in derivatives, Sebi’s Wholetime Member Ananth Narayan said on Saturday.

An expert group under former RBI executive director G Padmanabhan continues to work on bettering the system, and some moves on ease of doing business and better risk management are being mulled, he added.

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”At this point in time, there is no thought of Sebi taking any further steps in this particular regard,” Narayan said, addressing an event organised by Sebi-promoted NISM.He also made it clear that the Sebi is not mulling any steps on ”suitability and appropriability”, which will determine who can trade in the derivatives market.It can be noted that in November, Sebi imposed a set of restrictions to curb highly speculative trades in the futures and options market after data pointed out that retail investors lost money in 93 per cent of the trades over the last three years.Making it clear that Sebi has nothing against derivatives and that they help in price discovery and deepening the market, Narayan assured that the tweaks will be introduced only after consultations.

Some of the measures being discussed within the market regulator include steps to better measure risk in the derivatives market.”What you need ideally is that the volumes in the cash market should be nice and liquid, and there should be depth in the market. And likewise, the volumes in the derivative market should also have depth, should also have good volumes,” he noted.