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Zerodha’s CEO Nithin Kamath praised the Securities and Exchange Board of India (Sebi) for its consultative approach, even when introducing tougher regulations for the financial industry.
Kamath, who serves on several committees, expressed his admiration for how Sebi involves industry experts and stakeholders before implementing regulations. He believes this practice has helped make India’s capital markets among the safest in the world.
He emphasized that consumer interests take priority for regulators, stating that being part of these committees often requires balancing the best interests of customers, even if it may not align with what’s best for the industry.
Kamath’s remarks come as Sebi recently announced new regulations for futures and options (F&O) trading, which aim to reduce excessive retail participation. These changes could lead to a decline in trading volumes and revenue for top brokers.
Among the six new measures, two key changes will significantly impact the market: the increase of contract sizes and the limitation of weekly expiry contracts. Currently, the contract size for index F&O contracts ranges from ₹5 lakhs to ₹10 lakhs, but starting November 20, 2024, this will rise to between ₹15 lakhs and ₹20 lakhs.
Additionally, stock exchanges will only be permitted to offer one weekly expiry contract for indices, limiting the current offering of multiple weekly expiries. However, there will be no changes to monthly expiries.
These stricter F&O regulations could affect up to 60% of overall F&O trades and approximately 30% of Zerodha’s total orders, Kamath noted.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
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