The meeting of the governing body of the Securities Exchange Board of India (SEBI) is going to be held on September 30. Many matters including index derivatives are expected to be discussed in it. Market regulator SEBI has been trying to strengthen the index derivative framework for a long time.
The new framework will have a huge impact on the securities market. There will be a reduction in retail investors trading in derivatives for quick profits. SEBI had issued a consultation paper on this on July 30.
Weekly expiry proposed in index derivative contracts The consultation paper proposed only weekly expiry of index derivative contracts instead of daily expiry. It also proposed to increase the minimum contract value.
Rules related to strike prices may also change In SEBI's proposal, it was said to increase the minimum contract value to 15-20 lakhs initially. Later, there was a plan to increase it to 20-30 lakhs. It was also said to change the rules related to strike prices.
93% of traders suffer losses in F&O trading Finance Minister Nirmala Sitharaman and SEBI Chief Madhabi Puri Buch have expressed concern over the growing interest of retail investors in F&O. A recent SEBI report states that 93% of traders suffer losses in F&O trading.
The new framework of F&O will be discussed in the board meeting SEBI had sought opinion on its consultation paper by 30 August. It is highly expected that the new framework of Futures and Options (F&O) will be discussed in the meeting of SEBI's board on 30 September. Apart from this, the launch of Performance Validation Agency is also expected to be discussed in this meeting.
Sebi had floated a consultation paper about a year ago on a proposal to set up a performance validation agency to verify performance claims of intermediaries, including research analysts (RAs).
Performance Validation Agency will come into existence soon On August 2, at a program organised by industry chamber FICCI, Madhabi Puri Buch had said that the Performance Validation Agency will come into existence soon. However, people associated with the matter have said that there are some technical difficulties in creating it.
However, RAs, Investment Advisors (IA) and Algo Traders will be keeping an eye on the SEBI meeting on September 30. The reason for this is that the start of the Performance Validation Agency will have a direct impact on their work.
The rules related to publish issue will be made logical On June 26, SEBI had also talked about making the rules related to published issue logical. This includes listing regulations along with capital issue and disclosure requirements regulations. Changes in these will increase the ease of doing business.
The rules for classification of promoter group companies will change There will also be changes in the rules related to the appointment of directors. The rules for classification of promoter and promoter group companies will change. The responsibility of disclosure will be on important positions related to management.
Graphics Source: VaskarAssets
