Sebi steps to curb frenzy, aid capital formation

India's capital markets ecosystem has seen significant growth, but the challenges of preserving trust and ensuring effective regulation are ever-present, said Ananth Narayan G., whole-time member (WTM) of the Securities and Exchange Board of India (Sebi).

- Neha Joshi

At the 17th Mint BFSI Summit & Awards, Narayan outlined the regulator's response to the frenzy in futures and options, by implementing targeted measures to curb egregious over-trading, particularly around expiry days.

These steps, introduced in October 2024, aimed to address specific risks without burdening the entire F&O market with overly broad restrictions, Narayan said.

However, the regulator was also looking at ways to grow the F&O ecosystem for capital formation, he added. "Even as we judge the impact of these steps over the next few months, we are now looking at ways to grow the F&O ecosystem so that it contributes to price discovery, market depth, risk management, and ultimately, to capital formation," he said.