Sebi is looking at whether margin requirements can be reduced for longer-term derivative contracts, Chairman Tuhin Kanta Pandey said at a SBI Banking and Economics Conclave on Wednesday, according to CNBCTV18 report. The comments come at a time when the regulator is trying to balance two objectives of reducing speculative excess in short-term derivatives and making India’s capital markets deeper, more liquid and better suited for long-term capital formation.
Sebi has tightened several areas of the F&O market over the past few years, especially around short-dated options and expiry-day trading. Retail losses in derivatives have remained a key regulatory concern. A possible reduction in margin requirements for longer-term contracts would signal that the regulator may not be against derivatives as a product, but wants trading activity to move towards more stable, longer-tenure instruments.
