SEBI Awaits Impact of New F&O Rules Before Announcing Further Reforms

SEBI Chairman Tuhin Kanta Pandey Flags Concerns Over Short Term Options Activity, Signals Cautious Approach to Further F&O Reforms​

SEBI to Review Impact of Existing Futures and Options Regulations Before New Changes​

The Chairman of the Securities and Exchange Board of India, Tuhin Kanta Pandey, has indicated that the market regulator will adopt a measured stance before introducing any additional reforms in the futures and options segment.

In an exclusive interview with CNBC-TV18, Pandey made it clear that the regulator’s immediate focus is on evaluating the effectiveness of recently implemented measures in the derivatives market rather than rushing into fresh regulatory changes.

Concerns Over Short Term Dated and Weekly Options​

Pandey highlighted specific concerns around short term dated options, particularly weekly contracts. According to him, the regulator has observed elevated levels of activity and speculation in these instruments.

He noted that such heightened trading did not necessarily serve a meaningful economic purpose. The sharp rise in participation in short duration options contracts has drawn regulatory attention, especially where speculative behavior outweighs genuine hedging or risk management needs.

Risk Management Measures Introduced in the F&O Market​

Over the past 12 months, SEBI has rolled out a series of risk management measures aimed at strengthening oversight in the futures and options market.

These measures include:

• Tighter position limits
• Upfront payment requirements
• Expiry day margin norms
• Real time intraday monitoring of market wide position limits

In December, the regulator introduced additional steps, including:

• Removal of the one day grace period for index derivative limits
• Introduction of a pre open session for futures contracts

These reforms were designed to enhance market stability and improve monitoring of derivatives exposure.

No Immediate Timeline for Further Reforms​

Pandey emphasized that SEBI will continue to closely monitor the impact of the existing regulatory framework. He reiterated that the regulator intends to analyze market data thoroughly before considering any new interventions.

He stated that evaluating the outcomes of the current measures remains the priority, and setting a timeline for additional reforms is not an immediate focus.

With derivatives activity under close watch, SEBI’s approach signals a data driven and cautious regulatory strategy for India’s futures and options market.