Sebi Official Advocates for Enhanced Safeguards in Derivatives Trading

Securities and Exchange Board of India (Sebi) Whole-Time Member K V R Murty has suggested that the derivatives market may require additional guardrails to protect retail investors. Speaking at the Business Standard BFSI Insight Summit on Tuesday, Murty highlighted the surge in trading activity specifically observed on expiry days.

Strengthening Market Integrity

According to Murty, the regulator’s primary objective remains the protection of investor interests and the maintenance of market integrity. Key points discussed include:

• Transparency Initiatives: The regulator aims to clarify risks associated with derivative products, enabling investors to make well-informed decisions.
• Evidence-Based Policy: Sebi recently completed two studies focused on the derivatives segment, which are intended to guide future regulatory measures.
• Technological Prowess: Murty commended Sebi’s technical capabilities, noting the use of in-house artificial intelligence (AI) tools and near-real-time surveillance systems to monitor market activity.

Addressing Market Feedback

Regarding the closing auction session, which has previously caused market volatility, Murty confirmed that Sebi is actively engaging with the ecosystem. The regulator reported receiving feedback from approximately 20,000 participants. This outreach is part of Sebi's efforts to ensure that regulatory changes are informed by the perspectives of diverse stakeholders.

Investors are encouraged to review official Sebi circulars and policy documents directly on the regulator’s website to understand how these proposed discussions might influence future trading requirements.