The deluge of suggestions acquired on its July session paper to strengthen the index derivatives framework might make it tough for the market regulator to reach on the remaining norms and immediate a rethink on not less than among the seven proposed modifications, stated market watchers.
The proposals are prone to be taken up by the SEBI board this month however a remaining determination could also be deferred, they stated.
Whereas the SEBI chairperson had, at a latest public occasion, stated that 6,000 responses have been acquired on the paper, the ultimate figures may very well be within the vary of 10,000-15,000. That is unprecedented because the variety of responses on any session paper is usually in a couple of a whole lot.
The excessive numbers may very well be the results of a number of particular person merchants submitting their responses and indicative of a largely detrimental response. “The chance of tweaks to the present set of proposals could be very excessive. They should not less than scan by the entire feedback and have sufficient documentation to justify no matter determination they arrive at lastly,” stated a senior dealer.
SEBI’s new proposals might scale back fairness derivatives’ volumes by 30-40 per cent, affect alternate valuations and hit retail-focused brokers probably the most. “A number of the responses have come from non-serious gamers. We’ll do our greatest to take note of the opinions and views which have been submitted,” stated a SEBI official. An electronic mail despatched to SEBI didn’t get a response.
RTI utility
An RTI utility has sought data from the market regulator on the variety of responses acquired on its session paper together with the variety of those that have given detrimental suggestions.
Explaining the rationale for submitting the RTI utility, Rohit Jain, Managing Accomplice, Singhania & Co, a full-service legislation agency stated, “A lot of responses have been acquired on the proposals. The entire train of taking inputs from stakeholders shouldn’t be a mere eyewash and no regulatory change must be led to with out taking cognizance of the identical.”
Based mostly on the reply to the RTI question, Jain representing stakeholders, might method the courts if required.
In line with the July proposals, the regulator plans to extend the contract dimension for choices contracts 3-6x occasions in phases, as much as ₹30 lakh. Weekly choices contracts can be supplied on a single benchmark index of an alternate. Choice premiums should be collected upfront from purchasers.
Present strike value introduction methodology could also be rationalised and the margin profit for calendar spreads wouldn’t be supplied for positions involving contracts expiring on the identical day.