The Securities and Exchange Board of India (SEBI) is planning to link the extent of investors’ exposure to futures and options to what they earn, said three people familiar with the development. The move is aimed at preventing individuals from taking unaffordable positions in risky instruments but market participants fret about the impact of such a move on derivatives volumes. Globally, market regulators are implementing parameters such as education as filters for investor suitability in risky instruments. However, such criteria are difficult to implement in India, SEBI officials mentioned. Though the parameters are yet to be decided, this move has been much appreciated by the experts.
March 12th, 2018