Sebi plans longer-tenor derivative products

The Securities and Exchange Board of India (Sebi) plans to pivot towards longer-tenor derivatives products to ensure they serve their intended purpose of hedging, said chairman Tuhin Kanta Pandey on Thursday.

- KHUSHBOO TIWARI

He called for greater "quality and balance" in the derivatives market, where trading volumes are disproportionately higher than the underlying cash segment.

Pandey also signaled the possibility of a pilot platform for pre-IPO companies. Speaking at the 22nd edition of Ficci's Annual Capital Markets Conference (Capam), the Sebi chairman said: "We have often stated that equity derivatives play a crucial role in capital formation, but we must ensure quality and balance. We will consult with stakeholders on ways to improve, in a calibrated manner, the tenor and maturity profile of derivative products, so that they better serve hedging and long-term investing." His remarks come against the backdrop of mounting losses for individual investors in derivatives trading and allegations of manipulation by global high-frequency trading firms.