INSUBCONTINENT EXCLUSIVE:
per cent.
These measures aim to reduce excessive speculation in the futures and options (F&O) segment, where daily turnover often exceeds
Rs 500 trillion and retail investors end up on the losing side of the trade more often.Click here to connect with us on WhatsApp
Sebi has
decided to increase the contract size from Rs 5 lakh to Rs 15 lakh, raising margin requirements and mandating the upfront collection of
position limits, and remove the calendar spread treatment on expiry days.
The steps are to increase the entry barrier for retail investors
whose losses have been mounting, according to a recent study by the watchdog.
Analysts had estimated that the curbs may bring down the
volumes on the National Stock Exchange (NSE) by nearly one-third
Rs 144 trillion.
Besides the fresh derivatives curbs, futures trading volumes are also seen to be impacted on account of the increase in
securities transaction tax, which came into effect from Tuesday.
Further, many expect the volumes to shift to the Gujarat International
expiries to a single index on the NSE and BSE could encourage a shift in trading volumes towards GIFT City, which still offers a wider range
with around 2 million contracts traded monthly
Agarwal.
As far as onshore trading is concerned, the impact of the new measures on the BSE may be lower than on the NSE, given its
accounts for a chunky portion of the revenues for both brokers and stock exchanges.
Zerodha, the largest broker in terms of profitability,
has estimated a decline of 30-50 per cent in revenue owing to the changes.
Stockbrokers are planning to diversify their revenue streams to
The same for the BSE was Rs 366 crore
A majority of this is contributed from the F&O segment and has surged on the back of heightened activity.
Three of the key measures by the
market regulator will kick in from November 20, while others will be effective from February and April next year.
According to an earlier
These higher spreads will ultimately be absorbed by retail traders, creating unintended additional costs for both retail and institutional
believe, may lead to some retail participants taking disproportionately higher risks.
A Sebi expert group is expected to monitor the
impact of the proposed changes and go back to the drawing board in case more follow-up action is warranted.Mapping impact
> Sebi
introduced higher contract size, margin, and upfront collection of premium from Option buyers
> Three of the six measures to be effective
from November 20
> Over 93% retail traders incurred losses between FY22 and FY24
> Market experts expect BSE to be impacted lesser
than NSE as the later has more products in weekly expiry
> Zerodha anticipates 30-50% dip in revenues, other brokers also estimate a
dipFirst Published: Oct 02 2024 | 7:43 PMIST
