No proposal to curb retail participation in derivative markets, says SEBI

Further, 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.

New Delhi: Markets regulator, SEBI has clarified that there is no proposal to curb retail participation in derivative markets.

The clarification came after some media articles speculated that SEBI was seeking to curb retail participation in derivative markets. SEBI said currently, for trading in the derivative segment, SEBI Circular dated December 3, 2009 (now incorporated under Master Circular for Stock Brokers dated May 17, 2023) prescribes that the stock broker shall have documentary evidence of financial capability for all clients.

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SEBI, in line with the objective of ease of doing business, is at an early stage of evaluating if the aforesaid circular can be made applicable based on risk assessment of the clients. This would promote ease of compliance for brokers and investors.

Further, 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.

It is reiterated that proposals which result in any change in the regulatory framework, go through a process of comprehensive consultation with all stakeholders, including the public, before any decision is taken by the Board, the regulator said.