MC EXCLUSIVE SEBI assessing impacts of derivatives measures taken earlier, new move only based on data and consultation

SEBI Chairman Tuhin Kanta Pandey.

• SEBI is monitoring impact of curbs on short-dated index options.
• Further intervention in derivatives market based on data and consultation,
• 'We can't be doing flip flopping' and we should move consistently

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SEBI Chairman Tuhin Kanta Pandey has said the regulator is closely assessing the impact of measures taken earlier aimed at curbing excessive speculation in the derivatives market, particularly in short-dated index options, and has not ruled out further intervention if data warrants it.

In an exclusive interaction with Moneycontrol, the chairman of the Securities and Exchange Board of India (SEBI) clarified that regulatory concerns were concentrated in a specific pocket of the derivatives segment. “The concern was mainly around short-dated index options, especially weekly expiry contracts. The rest of the derivatives market is not of that concern,” Pandey said.

SEBI had earlier published a detailed study highlighting the extent of retail investor losses in options trading, suggesting 9 out of 10 retail traders lose money. According to Pandey, the study helped create awareness about the complexity and risks inherent in derivatives trading.

He also pointed to the role of unregistered financial influencers who promoted high-risk trading strategies on social media platforms, often portraying derivatives as a quick path to wealth. Pandey said the derivatives market is complex, but easy money dreams were sold by fin-fluencers, “the way it was being sold out by the so-called fin-fluencers, as in that market, to really make big money overnight.  He said SEBI has stepped up enforcement against individuals offering advice without proper registration.

Pandey said that over the past year, SEBI introduced a series of regulatory steps to rein in excessive speculation. Measures were rolled out in October 2024, followed by six additional interventions in May 2025, the last of which came into force in December. Pandey said the regulator is now in an evaluation phase. “If we find that there is an intervention necessity, we will then explore pathways in consultation with industry, how to do it right”, he said. His comments indicate that while SEBI is not rushing into fresh curbs, it remains prepared to act if speculative activity resurfaces or retail losses persist at concerning levels.

On the question of whether India should introduce eligibility criteria for derivatives participation, such as certifications or accredited investor requirements followed in some Western markets, Pandey said no decision has been taken yet. “that will again depend upon what kind of analysis will come forward, in what way the measures have acted, and, then it will be like exploring different pathways, which might include the pathways that you are suggesting. But they are not the only pathways”.

Pandey emphasised that SEBI is not in a hurry to come up with any kind of regulation, but it will be in a calibrated approach. “We can't be doing flip-flopping and we should move consistently. A data-based approach and consultative approach in this matter”.

Steps taken to curb F&O frenzy

Between November 2024 and December 2025, the SEBI rolled out sweeping derivatives reforms to curb excessive retail trading. Weekly expiries were restricted to one benchmark index per exchange, contract sizes were raised to Rs 15–20 lakh, and full upfront option premium collection was mandated. Calendar spread margin benefits were removed on expiry day, with an added 2 percent Extreme Loss Margin (ELM) on short options.

In 2025, SEBI introduced the second wave of measures, including Intraday position monitoring, delta-based risk calculations, tighter MWPL norms, limiting the weightage of stocks in indices to avoid concentration risk, and stricter F&O ban rules. Other measures included Pre-open sessions in derivatives and tighter F&O eligibility norms. In the recent Union Budget, the government has proposed a further hike in STT rates on F&O transactions. This year, SEBI has issued a circular with the aim to remove calendar spread benefit margin for single stock derivatives.

Also read: Full interview of SEBI Chairman Tuhin Kanta Pandey