“At this cut-off date, there isn’t any considered Sebi taking any additional steps on this explicit regard,” Narayan mentioned, addressing an occasion organised by Sebi-promoted NISM right here.
He additionally made it clear that the Sebi is just not mulling any steps on “suitability and appropriability”, which can decide who can commerce within the derivatives market.
It may be famous that in November, Sebi imposed a set of restrictions to curb extremely speculative trades within the futures and choices market after information identified that retail buyers misplaced cash in 93 per cent of the trades over the past three years.
Making it clear that Sebi has nothing in opposition to derivatives and that they assist in value discovery and deepening the market, Narayan assured that the tweaks can be launched solely after consultations.
A number of the measures being mentioned inside the market regulator embrace steps to higher measure threat within the derivatives market. “What you want ideally is that the volumes within the money market must be good and liquid, and there must be depth out there. And likewise, the volumes within the spinoff market also needs to have depth, also needs to have good volumes,” he famous. It is very important make it possible for there’s some form of connectivity within the liquidity of the 2 markets, he mentioned.
“What could be very clear to us is the present means of measuring open curiosity as notional of futures and notional of choices is solely not proper. It offers a really, very unsuitable image, and there’s a must debate how we transfer ahead right into a extra significant metric,” he mentioned.
Narayan mentioned the Sebi can be contemplating linking market-wide place limits to supply volumes.
Linked to the identical, it’s contemplating a revision of index coaching limits imposed throughout the COVID pandemic to manage volatility, the WTM mentioned.
Sebi can be wanting on the query of getting indices with futures and choices with very excessive concentrated weightages of some particular shares from a perspective of guaranteeing belief within the system, Narayan added.
“Usually in social media, we hear murmurs that one thing unsuitable is occurring, particularly in index buying and selling. That there’s some manipulation occurring within the money market, which is resulting in some form of exercise within the spinoff markets, and general, it’s creating…both large volatility or no volatility and that it’s being finished as a manipulation for some individuals to revenue,” he mentioned.
One of many questions Sebi is grappling with is whether or not ought to there be restrictions on how a lot weightage the highest inventory or the highest three shares have within the F&O indices.
“…these are a number of the issues that are on our thoughts. What you’ll discover is all of those are largely — both ease of doing enterprise by way of rising limits, rising the scope of what will be finished, or within the nature of constructing positive all of us measure our dangers higher,” he mentioned.
