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Key Points

SEBI Chairman Tuhin Kanta Pandey has indicated the regulator is considering extending equity derivatives tenure after stakeholder consultation. This comes amid SEBI data showing 91% of individual traders suffered net losses in the derivatives segment. The regulator analyzed trading activity from December 2024 to May 2025 to assess recent framework changes. SEBI emphasizes the need for calibrated measures to ensure quality and balance in the F&O market.

Key Points: SEBI May Extend Equity Derivatives Tenure Says Chairman Pandey

  • SEBI considering calibrated extension of equity derivatives contract tenure
  • 91% individual traders incurred net losses in derivatives segment
  • Index options turnover down 9% in premium terms year-on-year
  • Number of unique individual F&O traders decreased by 20%
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SEBI may extend equity derivatives tenure, says chairman Tuhin Kanta Pandey

SEBI Chairman Tuhin Kanta Pandey indicates potential extension of equity derivatives tenure after consultation. Regulator aims to address 91% individual trader losses in F&O segment.

"All this will be done in consultation, in what form, how, when... Yes (there will be a consultation paper) - Tuhin Kanta Pandey, SEBI Chairman"

Mumbai, August 21

Tuhin Kanta Pandey, Chairman of the Securities and Exchange Board of India (SEBI), on Thursday, indicated that the regulator is considering increasing the tenure of equity derivatives after discussion with stakeholders.

Speaking to reporters on the sidelines of FICCI's 22nd annual Capital Markets Conference in the financial capital, SEBI Chairman said, "All this will be done in consultation, in what form, how, when... Yes (there will be a consultation paper). I can't tell you that but that is the thinking process we have.... That is qualitatively what we have to see...we have to be calibrated. If you look at my statement where i said we have to look at (it) in a calibrated manner."

SEBI Chairman Pandey further indicated a need to ensure quality and balance in the F&O segment.

The move has significance, as a recent SEBI analysis highlighted that nearly 91 per cent of individual traders incurred net losses in the Equity Derivatives Segment (EDS) at the aggregate level in the recently concluded financial year 2024-25. A similar trend was observed in 2023-24 too.

This SEBI analysis came after certain media reports claimed that investor losses had started to reduce after the markets regulator had, on October 1, 2024, introduced some measures to strengthen the equity index derivatives framework.

Markets regulator SEBI analysed the trading activity of all investors and individual investors for the period December 2024 to May 2025, to present the factual impact of measures to strengthen the equity index derivatives framework introduced on October 1, 2024.

The SEBI said index options turnover, year on year, is down by 9 per cent (in premium terms) and 29 per cent (in notional terms). However, compared to the level two years ago, index options volume is up by 14 per cent (in premium terms) and 42 per cent (in notional terms).

Turnover of individuals in premium terms in EDS is down by 11 per cent year on year and up by 36 per cent over the similar period two years ago.

The number of unique individual investors trading in EDS is down by 20 per cent compared to the previous year and up by 24 per cent from two years ago.

The financial year-wise trend for a six-year period (2019-20 - 2024-25), along with analysis of profit and loss of individual traders in EDS is covered in the full study carried out by SEBI.

- ANI

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Reader Comments

P
Priya S
As someone who lost money in F&O, I appreciate SEBI's concern. But extending tenure alone won't help - we need better financial literacy programs. Most people don't understand derivatives properly.
A
Arjun K
The data speaks for itself - 91% losses! SEBI should focus on stricter eligibility criteria for F&O trading rather than just extending tenure. Too many inexperienced people are jumping into derivatives.
M
Michael C
Interesting development. Longer derivative tenures could attract more institutional participation and reduce retail speculation. The 20% drop in unique individual traders suggests the October measures are working.
S
Shreya B
Hope this brings some stability to the market. The constant volatility because of weekly expiries makes long-term investing difficult. Longer tenures might help genuine hedgers.
V
Vikram M
SEBI is doing the right thing by being calibrated. Sudden changes can disrupt markets. The consultation process with stakeholders is crucial - hope they listen to actual traders' experiences.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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