Sebi to announce F&O measures "very soon" through a draft circular

Individual traders in the futures and options (F&O) market have suffered a staggering Rs 1.8 lakh crore in aggregate losses over the past three fiscal years.

A draft circular relating to tighter derivatives regulations are expected to be issued "very soon", people familiar with the development told Moneycontrol on condition of anonymity.

Sources also said these draft measures regarding derivatives regulations do not require approval from capital market regulator Sebi's board.

The capital market regulator did not make any changes to the index-derivatives rules following the much-anticipated board meeting on September 30.

Moneycontrol had exclusively reported on July 9 that the capital market regulator was considering a new framework based on the recommendations of a Working Committee on Futures and Options. Sebi had appointed an expert committee to address excessive speculation in the derivative market.

India’s F&O market has seen an explosive growth in volumes post Covid-19, and a vast majority of individual traders and proprietorship firms are ending up on the losing side, as per Sebi.
According to regulator's estimates, around 92.5 lakh such players lost around Rs 51,700 crore in FY23 (excluding statutory transaction costs).

Another recent Sebi study on individual traders in the futures and options (F&O) market showed a staggering Rs 1.8 lakh crore in aggregate losses over past three financial years, with nearly 93 percent of more than 1 crore investors, or nine out of 10 traders, incurring average losses of Rs 2 lakh each.