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SEBI mulls stricter rules for retail F&O investors As on : 11-Nov-24  13:59

The Securities and Exchange Board of India (SEBI) is considering imposing stricter regulations on retail investors participating in the futures and options (F&O) segment of the Indian equity market.

According to media reports, the market regulator is exploring the possibility of implementing investor eligibility criteria similar to those for Alternative Investment Funds (AIFs). This move is aimed at safeguarding small investors from the inherent risks associated with F&O trading.

Sriram Krishnan, chief business development officer at the National Stock Exchange (NSE), was quoted by the media as saying that SEBI is considering these measures. He hinted that a framework for accredited investors could be introduced for F&O trading, similar to the existing system for investments in hedge funds and private equity, which require a minimum net worth.

SEBI has already taken steps to curb excessive speculation in the F&O market. These include increasing lot sizes, restricting weekly expiry contracts, and imposing higher transaction charges. The regulator is implementing these changes in phases, with the final set of measures scheduled for April 2025.

While the immediate impact of these changes on trading volumes remains to be seen, market experts believe that the measures will help create a more stable and regulated F&O market in India.

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