Short-term F&Os denting capital formation: Sebi

The stock market regulator is considering fresh measures to boost India's cash market turnover and curb the dominance of speculative short-term products in the domestic equity derivatives market that pose a threat to capital formation in the country, whole-time member of the Securities Exchange Board of India (Sebi) Ananth Narayan G said on Thursday.

- KHUSHBOO TIWARI

Sebi is also looking at steps to extend the tenure and maturity of equity derivatives to mitigate short-term contracts. While Narayan acknowledged that derivatives are vital for price discovery, hedging and market depth, he flagged certain trends in the ecosystem have warranted a closer look by the regulator.

"Unlike longer-term derivatives, short-term derivative products such as expiry day trading in index options may detract from capital formation," he noted at the CII Markets Conclave.