“At this cut-off date, there is no such thing as a considered Sebi taking any additional steps on this explicit regard,” Narayan stated, addressing an occasion organised by Sebi-promoted NISM right here.
He additionally made it clear that the Sebi just isn’t mulling any steps on “suitability and appropriability”, which is able to 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 knowledge identified that retail traders misplaced cash in 93 per cent of the trades over the past three years.
Making it clear that Sebi has nothing towards derivatives and that they assist in value discovery and deepening the market, Narayan assured that the tweaks might be launched solely after consultations.
A few of the measures being mentioned inside the market regulator embody steps to raised measure danger within the derivatives market. “What you want ideally is that the volumes within the money market needs to be good and liquid, and there needs to be depth available in the market. And likewise, the volumes within the spinoff market must also have depth, must also have good volumes,” he famous. It is very important make it possible for there’s some sort of connectivity within the liquidity of the 2 markets, he stated.
“What may be very clear to us is the present manner of measuring open curiosity as notional of futures and notional of choices is just not proper. It provides a really, very mistaken image, and there’s a must debate how we transfer ahead right into a extra significant metric,” he stated.
Narayan stated 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 stated.
Sebi can be trying 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.
“Typically in social media, we hear murmurs that one thing mistaken is occurring, particularly in index buying and selling. That there’s some manipulation occurring within the money market, which is resulting in some sort of exercise within the spinoff markets, and total, it’s creating…both big volatility or no volatility and that it’s being executed as a manipulation for some folks to revenue,” he stated.
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 few 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 growing limits, growing the scope of what might be executed, or within the nature of creating certain all of us measure our dangers higher,” he stated.
