Cautious Approach: SEBI to Monitor New Futures & Options Measures

SEBI Chairman Tuhin Kanta Pandey Adopts Cautious Approach on Futures and Options Reforms​

SEBI to Assess Impact of Existing F&O Market Regulations Before New Measures​

The Chairman of the Securities and Exchange Board of India, Tuhin Kanta Pandey, has indicated that the market regulator will adopt a measured stance on further reforms in the futures and options market. The regulator plans to evaluate the effectiveness of the rules already implemented before introducing any additional changes.

In an interview with CNBC-TV18, Pandey said the focus remains on understanding how the existing framework is influencing market behaviour, particularly in segments that have witnessed heightened trading activity.

SEBI Concerned About Short-Term and Weekly Options Activity​

Pandey highlighted that SEBI is closely watching short-term dated options and weekly options contracts, where trading volumes have seen sharp activity.

He stated that such hyperactivity may not necessarily contribute to meaningful economic outcomes. According to him, these segments have drawn particular attention due to the intensity of participation and the potential for excessive speculation.

Risk Management Measures Introduced Over the Past Year​

Over the last twelve months, SEBI has rolled out several risk containment measures in the futures and options segment to strengthen market stability.

Key initiatives include:

• Implementation of position limits
• Introduction of upfront payment requirements
• Expiry day margin framework
• Removal of the one-day grace period for index derivative limits
• Launch of a pre-open session for futures contracts
• Real-time intraday monitoring of market-wide position limits

In December, additional steps were introduced to tighten oversight, particularly around index derivatives and trading limits.

Data-Driven Approach Before Further Reforms​

Pandey clarified that SEBI will continue to monitor the impact of these measures across the broader market ecosystem. The regulator intends to collect and analyse data before taking any decision on new regulatory interventions.

He emphasized that setting a timeline for additional reforms is not currently a priority. Instead, the focus remains on assessing whether the current framework is effectively addressing concerns in the futures and options market.

As SEBI continues its evaluation, the regulator’s cautious and data-driven approach signals that any future reforms in the F&O market will be based on measured analysis rather than immediate policy shifts.