Sebi Chairperson open to removing certain derivative products amid regulatory concerns

New Delhi: Sebi Chairperson Madhabi Puri Buch said she is open to rSebi Chairperson open to removing certain derivative products amid regulatory concernsemoving certain derivative products from the market if experts recommend it. Buch pointed out that trading in weekly options is highly speculative and that the market understands the regulatory risks involved.

At a press conference after a Sebi Board meeting, Buch discussed concerns in the F&O segment, especially the speculative trading in weekly options and on expiry days. She stressed the importance of protecting investors, mentioning instances where people borrowed money for speculative trading and suffered big losses, even losing their homes.

When asked by Moneycontrol if Sebi would see a drop in trading turnover as a step back, Buch said, “Not at all.” She said that if the data and logic support removing certain products, Sebi would do it, even if it affects the financials of stock exchanges and related companies.

Buch noted that regulatory risk is a part of any business, similar to the risks faced by pharmaceutical companies and banks. She mentioned Zerodha’s founder Nithin Kamath, who tweeted about regulatory risk being the biggest threat for stock brokers after the RBI’s restrictions on unhedged currency derivatives in April 2024.

Buch concluded by saying that the market is mature enough to understand and accept regulatory risks, which are common in all sectors worldwide, not just in the capital markets.

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