India regulator says no proposal to curb retail derivatives trades

INDIA’S market regulator said on Saturday (Jul 29) there was no proposal to curb retail participation in equity derivative markets, but that it was considering a client risk assessment.

Reuters reported on Friday that the Securities and Exchange Board of India (SEBI), seeking to reduce risks for retail investors, would propose linking the amount of equity derivatives they may trade to their wealth.

Citing what it said were speculative media reports, SEBI said in a statement that “it is clarified that there is no proposal to curb retail participation in derivative markets”.

But it said it was examining whether existing requirements for participating in the derivative markets could be extended to include a risk assessment of clients.

“SEBI’s focus has always been on adequate risk management, while ensuring ease of doing business and compliance, rather than on placing any curbs on trading,” the regulator said.

It said proposals that could change the regulatory framework would “go through a process of comprehensive consultation with all stakeholders including the public, before any decision is taken by the board”. REUTERS