Market regulator SEBI is not planning to take any further steps to curb activity in the derivatives segment. This information has been given by SEBI wholetime member Anant Narayan. Narayan said on Saturday that an expert group under the leadership of former Reserve Bank Executive Director G Padmanabhan is working on improving the system. He said that some steps are being considered for ease of doing business and better risk management.
Ananth Narayan’s full statement
“At this point of time, there is no view from Sebi of taking any further steps to curb activity in the derivatives segment,” Narayan said at an NISM event promoted by Sebi. He clarified that SEBI is not considering taking any step regarding ‘fitness and suitability’ which would decide who can trade in the derivatives market.
SEBI had imposed restrictions in November last year
SEBI had in November last year imposed a set of restrictions to curb highly volatile trading in the futures and options market. SEBI had taken this step after the figures of investors losing money in 93 percent trades in the last three years came to the fore.
‘SEBI not against derivatives’
The whole-time member of SEBI said that SEBI is not against derivatives and they help in price discovery and market consolidation. He said changes regarding derivatives would be introduced only after consultation. Some of the measures being discussed within the markets regulator include steps to better measure risk in the derivatives market.
“You ideally want the cash market to have good volume and depth,” he said. Similarly, the volume in the derivatives market should also be extensive. “It is important to ensure that there is some kind of connectivity in the liquidity of both the markets.”