SEBI said that existing regulatory measures have been reviewed to ensure investor protection.
Credit: PTI Photo
Mumbai: SEBI tightened the rules for equity derivatives trading on Tuesday, raising the entry barrier and making it more costly to trade in the asset class, despite pushback from investors.
The Securities and Exchange Board of India (SEBI) lowered the number of weekly options contracts available to trade for investors to one per exchange and raised the minimum trading amount nearly three times, according to a circular uploaded on the regulator's website.
Reuters first reported SEBI's intent to tighten its derivatives trading rules, in line with proposals it made in July, last month.
The minimum trading amount has been increased from Rs 5 lakh to Rs 15 lakh and Rs 20 Lakh, SEBI said in the circular.
The measures are effective November 20.
SEBI said that existing regulatory measures have been reviewed to ensure investor protection and the orderly development and strengthening of the equity derivatives market.
Authorities had raised concerns about the unchecked explosion of retail investor trading in derivatives and the possibility that it could create future challenges for the markets, investor sentiment and household finances.