Sebi is thinking of eligibility criteria linked to equity exposure to trade F&O
Sources - CNBC TV18 SEBI may tighten access to derivatives trading with new suitability norms: Sources - CNBC TV18
This is exhausting. Everyday something or the other will comeup. Can’t SEBI decide once and for all instead of all these changes.
Everyday thinking about retailer loss
And forget about national loss of Rupee @ 90, no one seen there, all ministers seeing retail F&O loss
10000+ people contest for few hundred seats in election with winning rate less than 10%, 10’s of lakhs of people write competitive exams with less than 1000’s being successful. Crores of people buy lottery with just one being successful. Ban Elections, competitive exams, lottery etc… We can go on and one and on with this statistics… But there is no logic in what they are doing so we cannot reason with them based on logic.
Yeah, that’s the whole irony.
The coolest part of capital markets is that they’re supposed to be free and open anyone can participate, learn, win or lose.
But with rules like this, that “freedom” slowly gets filtered. It won’t feel like a free market anymore if only people who meet certain checkboxes are allowed in.
Personally it makes me very happy to see SEBI do something that helps a larger portion of investors. Change will always make someone unhappy - that is the nature of change. But if the change helps protect those who are losing lacs and going into debt - I happily welcome that change.
change is welcome if you change once and wait for the results. assess the results and move ahead. have a long term roadmap for the change.
SEBI literally changes policies every month. then its not a change, its chaos
If SEBI does go ahead with linking F&O suitability to equity exposure, will SEBI be responsible for any losses incurred in equity?
That’s the whole point right? To prevent retail losses. Then how does linking to equity exposure reduce the losses?
Given the huge losses suffered by retail, government should provide subsidies to retail traders instead of - say, for elections, if they really wanted to help. Government is already talking more than 35% of FII profits. Why not at least redistribute it back to retail losers, if they really want to help retail in F&O? Instead, they barely do or unable to do anything against market/index manipulation. They even let Jane street back legally.
Could you explain how equity exposure would reduce F&O losses? If they have a hypothesis, did they even attempt a pilot study to prove their hypothesis? What is even the theory behind it? What is the percentage of losers in equity? Are equity investors really better off than F&O? Or is it just that F&O is the same equity version, but at 10x speed? Do they want retail to lose money, but slow enough that the general population doesn’t notice it? Just like they’re doing with the rupee?
SEBI isn’t doing this for the goodness of heart or retail F&O. I think they want more people to buy equity. Given the relentless FII selling and rupee at time low, they would like to avoid a market crash. I’m guessing SIP and MF money isn’t enough to provide a exit to FIIs.
I welcome all changes.
Either play the game or quit. Stop complaining.
I get your feeling, but should you really reward people for making terrible decisions ? Should you give a safety net to gambling which would in turn encourage it even more as my downside has some protection. No.
I do think some kind of barriers to entry is good, what should that be i dont know. But newbies dont know shit, shouldnt be playing around with leveraged stuff that easily.
Don’t they already have a barrier? With margin and lot size, it’s almost a certainty that people need to have good buffer money to play F&O in the first place.
Just search this forum, people are coming here losing all of their savings and then on top of that they take huge amounts of loans and lose that too.
Loan providers are also responsible for this.
Just because you have access to money, doesn’t mean you know what you are doing. Money stuff triggers emotions and emotions are generally higher in inexperienced people.
Anyway, i am not saying that this new rule is right, i dont know what is right but new guys need to understand leverage and risk.
Another factor that SEBI may be looking at is the Jane street episode. I think they exploited difference in liquidity in fno vs cash and since cash decides fno expiry result, one can take large position in fno with less slippage and then move the cash market with higher slippage. Atleast thats how i understood it.
ofc, govt wont reduce/remove STT in cash. They will try to find all sorts of workarounds, but not that.
By that reasoning, no one would ever protest anything. We would never have gotten independence with Que sera sera.
Wouldn’t they have lost the money in plain old gambling? As you’ve said, many people lose huge amounts and post here. If a new F&O player isn’t doing that basic research before they put their money, won’t they just put their money in some other scam? Even without all that research, there’s a big banner put by SEBI with every broker that 93% lose money… and that too every time they log in. Don’t they read that? If they did, and they take a informed decision through their own free will, why stop them?
A Fool and His Money are Soon Parted
Why blame F&O for that?
I get you, i trade too and had similar feelings during the api fiasco.
But are you saying that putting some initial brakes is wrong, wouldn’t that mitgate it somewhat ?
ofc how to do it is another matter and cant put the brakes forever. There must be a way out of it that is ideally earned in some way.
I am not saying ban fno.
Don’t protest na. That too not on a forum.
Just because free hit was introduced to penalise bowlers for no balls, they didn’t stop playing the game.
Our arguments will go nowhere. I personally have no issues with sebi rules. I am sure we all have right to have our opinion.
I’m saying the brakes already put are more than enough. Their efforts are best put in mitigating outright market manipulation rather than trying to curb retail F&O.
For now. But, where will you draw the line? What if SEBI increases margin needed for a lot, to say 100 crores? Would you still “welcome all SEBI changes”?
We all do have a right to our opinion and we are free to express even our frustration via “complaining” or protesting.
Absolutely. 
Has SEBI ever considered educating retailers in F&O?
Some kind of suitability/knowledge test ( may be NISM certification ) to ensure only those with the knowledge can trade in F&O?