SEBI issues Consultation Paper on Measures to strengthen index derivatives framework for increased Investor protection and Market stability. Derivatives market assist in better price discovery, help improve market liquidity and allow investors to manage their risks better. However, bursts of speculative hyperactivity in derivative markets, particularly by individual players, can detract from sustained capital formation by endangering both investor protection and market stability.
Given the changing market dynamics in equity derivatives segment in recent years with increased retail participation, offering of short tenure index options contracts and heightened speculative trading volumes in index derivatives on expiry date, this consultation paper seeks to introduce measures to enhance investor protection and promote market stability in derivative markets, while ensuring sustained capital formation.
Comments may be sent latest by August 20, 2024,via online web based platform.
