F&O Investors
SEBI not mulling entry level barriers for F&O investors, says member Narayan
This story was originally published at 20:24 IST on 24 March 2025
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--SEBI: Got 800 responses on Feb FPI paper on equity F&O norms
--SEBI Narayan: Not looking at entry level criteria for F&O investors
--CONTEXT: SEBI Whole Time Member Ananth Narayan speaks at press meet
--SEBI Narayan: Bourses free to set entry level norms for F&O investors
NEW DELHI – The Securities and Exchange Board of India is not considering imposing any entry-level criteria or requirement for investors to trade in the equity derivatives segments of stock exchanges, its Whole Time Member Ananth Narayan G., said on Monday. There are already know-your-client requirements set by the stock exchanges for clients opening trading accounts and they are free to include entry-level barriers for futures and options investors if they want to, Narayan said addressing a press conference after a board meeting.
Speaking at the press conference, SEBI Chairman Tuhin Kanta Pandey said the futures and options market is important, and speculation is important for price discovery in the market, and for hedging. Pandey said it was only the extremely high level of trading volume and positions in index options on a single day, the expiry, that led the market regulator to tweak norms in October last year.
On the SEBI proposal to tighten limits on open interest positions in futures and options, Pandey said the market regulator has received around 800 responses from market participants. In a consultation paper on Feb. 24, SEBI proposed tightening the limits on open interest in index options and shifting to a delta-based calculation of open interest instead of the current notional approach. SEBI had also proposed that derivatives contracts on a non-benchmark index should be introduced only if they meet four stringent criteria -- it has a minimum of 14 constituents, the top constituent's weight is below 20%, the combined weight of the top three constituents is below 45%, and if the index weights follow a descending weight structure.
SEBI is currently processing the responses it received to the consultation paper. SEBI is engaging with market participants on the proposals, Pandey said. He said SEBI had "detailed discussions with market participants and the relevant people" even while drafting the consultation paper. End
Reported by Rajesh Gajra
Edited by Saji George Titus
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