Stories
Sebi Eyes Margin Rationalisation for Longer-Tenure Derivatives to Boost Market Participation
- •Sebi is considering rationalising margin requirements for longer-tenure derivative products.
- •The move aims to encourage healthier, long-term participation in the Futures & Options (F&O) segment.
- •Chairman Tuhin Kanta Pandey stated that Sebi is open to reviewing and potentially lowering margin requirements.
- •The regulator is examining structural measures to make markets easier to access while preserving investor protection.
- •Pandey emphasized that ease of doing business and investor protection are not competing objectives, aiming for optimum regulation.
Key Questions Answered
Markets regulator SEBI is considering rationalising and potentially lowering margin requirements for longer-tenure derivative products to encourage healthier, long-term participation in the futures and options segment. The proposal under consideration also involves extending the regular margin framework threshold for index derivatives from 9 months up to 13 months.
The review aims to encourage healthier long-term market participation, facilitate risk-defined hedging strategies, and make markets easier to access while simultaneously curbing excessive speculative trading and expiry-day risks for retail investors.
SEBI aims to ensure that Indian financial markets become deeper, more diverse, efficient, resilient, and trusted as the economy grows, while balancing ease of doing business with robust investor protection.
