# Derivative exposure based on Income tax returns for retail traders - Outcome from latest SEBI board meeting
**URL:** https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279
**Category:** Announcements
**Created:** [March 28, 2018, 1:34pm UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279 "2018-03-28T13:34:19Z")
**Posts on this page:** 20
**Page:** 6
### Author:  [@Som\_E](https://tradingqna.com/u/Som_E)
#### Post date: [May 2, 2018, 11:32am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/105 "2018-05-02T11:32:40Z")
True. Agreed
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### Author:  [@sankar](https://tradingqna.com/u/sankar)
#### Post date: [May 4, 2018, 10:21pm UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/106 "2018-05-04T22:21:52Z")
Yes retail pplz not makin any money anyway, it will only discourage pplz mindset to not get involved in markets, very bad decission indeed…
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### Author:  [@sankar](https://tradingqna.com/u/sankar)
#### Post date: [May 4, 2018, 10:25pm UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/107 "2018-05-04T22:25:13Z")
All sign petition not to change anything ,all brojerage houses unite go go go
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### Author:  [@shouvik](https://tradingqna.com/u/shouvik)
#### Post date: [May 9, 2018, 5:36am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/108 "2018-05-09T05:36:06Z")
@nithin@siva-reddy Will trading in MCX also be affected ? If i don’t have any income then won’t I be allowed to trade in MCX as well? ☹
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### Author:  [@siva-reddy](https://tradingqna.com/u/siva-reddy)
#### Post date: [May 9, 2018, 6:00am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/109 "2018-05-09T06:00:16Z")
> [@shouvik](#):
>
> Will trading in MCX also be affected ? If i don’t have any income then won’t I be allowed to trade in MCX as well? ☹
Let SEBI implement this first and give us guidelines then we can conclude on this, till then can stop worrying.
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### Author:  [@Vandana1](https://tradingqna.com/u/Vandana1)
#### Post date: [May 9, 2018, 5:44pm UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/110 "2018-05-09T17:44:20Z")
Test will be online or on paper
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### Author:  [@Vandana1](https://tradingqna.com/u/Vandana1)
#### Post date: [May 9, 2018, 6:24pm UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/111 "2018-05-09T18:24:10Z")
Received this circular from sebi… if this circular is related to the topic being discussed in the thread …where is sebi wanting the linking of ITR for derivatives trading?
CIRCULAR
SEBI/HO/MRD/DRMNP/CIR/P/2018/75 May 02, 2018
All recognized Stock Exchanges (except Commodity Derivatives
Exchanges) and recognized Clearing Corporations, including those
in IFSC
Dear Sir/Madam
Additional Risk management measures for derivatives segment
Based on the feedback received from the Clearing Corporations and the
recommendations of the Risk Management Review Committee (RMRC) of SEBI, the
following additional risk management measures are required to be complied with and
implemented by the stock exchanges/clearing corporations for derivatives segment.
Margin Collection Requirement
2. For the Equity Derivatives segment, the client margins which are required to be
compulsorily collected and reported to the Exchange/Clearing Corporation, as the
case may be, by the Clearing members / Trading members shall include initial
margin, exposure margin/extreme loss margin, calendar spread margin and mark to
market settlements.
Margin Enforcement Requirement
3. With reference to SEBI circular CIR/DNPD/7/2011 dated August 10, 2011 captioned
“Short-collection/Non-collection of client margins (Derivatives segments)”, it is
clarified that the ‘margins’, for both Equity Derivatives Segment and Currency
Derivatives Segment, shall include margins as specified in Para 2 of this circular,
mark to market settlements or any other margin as prescribed by the
Exchange/Clearing Corporation to be collected by Clearing Members from their
clients (i.e. Custodial Participants and Trading Members - for their proprietary
positions) and by Trading Members from their clients.
Computation of Liquid Net worth
4. Further to SEBI circular IES/DC/Cir-4-99 dated 28th July, 1999, it is clarified that for
the equity derivatives segment, the liquid net worth shall be arrived at by deducting
initial margin and the exposure margin/extreme loss margin from the liquid assets of
the clearing member.
5. The provisions of this circular shall come into effect from June 01, 2018.
6. Stock Exchanges and Clearing corporations are directed to:
a) take necessary steps to put in place systems for implementation of the circular,
including necessary amendments to the relevant bye-laws, rules and
regulations;
b) bring the provisions of this circular to the notice of their members and also
disseminate the same on their websites; and
c) communicate to SEBI, the status of implementation of the provisions of this
circular in the Monthly Report.
7. This circular is being issued in exercise of powers conferred under Section 11 (1) of
the Securities and Exchange Board of India Act, 1992 to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market.
Yours faithfully
(Bithin Mahanta)
Deputy General Manager
Market Regulation Department
Email: bithinm@sebi.gov.in
---
### Author:  [@nithin](https://tradingqna.com/u/nithin)
#### Post date: [May 10, 2018, 2:32am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/112 "2018-05-10T02:32:37Z")
> [@Vandana1](#):
>
> if this circular is related to the topic being discussed in the thread …where is sebi wanting the linking of ITR for derivatives trading?
This is not related to the derivative exposure topic. Read below
> [@How does the latest SEBI circular about margin requirements affect me?](https://tradingqna.com/t/how-does-the-latest-sebi-circular-about-margin-requirements-affect-me/38381/6):
>
> About client given exposure based on networth/income/etc, there is no clarity yet from exchanges. We will have to wait and watch.
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### Author:  [@Som\_E](https://tradingqna.com/u/Som_E)
#### Post date: [May 10, 2018, 3:52am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/113 "2018-05-10T03:52:20Z")
> **[Sebi writes to govt urging tax parity between cash and derivatives](http://www.business-standard.com/article/markets/sebi-writes-to-govt-urging-tax-parity-between-cash-and-derivatives-118050700833_1.html)**
>
> The Securities and Exchange Board of India (Sebi) intends to have tax parity in the futures and options (F&O) segment. Sebi is of the view that the differentiating tax structure, particularly the securities transaction tax (STT), is incentivizing
> **[SEBI plans to mitigate market risks by linking trading volume to individual’s...](https://www.moneycontrol.com/news/business/sebi-plans-to-mitigate-market-risks-by-linking-trading-volume-to-individuals-tax-return-2564537.html)**
>
> Individual investors are presently required to disclose only their net worth to their brokers periodically
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### Author:  [@shouvik](https://tradingqna.com/u/shouvik)
#### Post date: [May 25, 2018, 3:50am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/114 "2018-05-25T03:50:41Z")
Is there any update on this decision by SEBI?
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### Author:  [@SurajM](https://tradingqna.com/u/SurajM)
#### Post date: [May 25, 2018, 11:20am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/115 "2018-05-25T11:20:42Z")
Let’s hope something comes out today as the Broker’s Body has a meeting scheduled with Sebi today…
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### Author:  [@Som\_E](https://tradingqna.com/u/Som_E)
#### Post date: [May 25, 2018, 2:22pm UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/116 "2018-05-25T14:22:20Z")
How do you know this?
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### Author:  [@sankar](https://tradingqna.com/u/sankar)
#### Post date: [May 27, 2018, 3:32am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/117 "2018-05-27T03:32:14Z")
Hello nitin does that mean, no job no trade bexause no tax, what about pplz doing this as a business
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### Author:  [@mparmar](https://tradingqna.com/u/mparmar)
#### Post date: [May 27, 2018, 3:45am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/118 "2018-05-27T03:45:07Z")
@nithin I find a big opportunity here for strategy based contracts which runs on upfront information of loss and profit out of that trade to a trader.
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### Author:  [@nithin](https://tradingqna.com/u/nithin)
#### Post date: [May 27, 2018, 7:15am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/119 "2018-05-27T07:15:30Z")
> [@mparmar](#):
>
> I find a big opportunity here for strategy based contracts which runs on upfront information of loss and profit out of that trade to a trader.
The issue with strategy based contracts will be liquidity. I have already made a representation on this. If the spreads itself trade, there will be no execution risk, the margins required to trade them also can drop significantly.
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### Author:  [@mparmar](https://tradingqna.com/u/mparmar)
#### Post date: [May 28, 2018, 10:07am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/120 "2018-05-28T10:07:19Z")
Yes . Margins will be dropped and small rather manual traders would be able to execute the trades without slippages
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### Author:  [@shouvik](https://tradingqna.com/u/shouvik)
#### Post date: [May 29, 2018, 8:24am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/121 "2018-05-29T08:24:38Z")
Will this have effect on traders who trade in MCX as well?
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### Author:  [@sankar](https://tradingqna.com/u/sankar)
#### Post date: [May 29, 2018, 11:50am UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/122 "2018-05-29T11:50:29Z")
Hello nitin does that mean, no job no trade bexause no tax, what about pplz doing this as a business?
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### Author:  [@Joy\_Sen](https://tradingqna.com/u/Joy_Sen)
#### Post date: [May 31, 2018, 5:39pm UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/123 "2018-05-31T17:39:00Z")
In India, trading derivatives is treated as “business” as per Income Tax law. So debarring someone from trading in Derivatives does mean barring someone to conduct his/her legal and legitimate business …:right to work" is a fundamental right as per our Constitution… therefore it would mean directly infringing on citizens’ fundamental rights… in a court of law…I guess SEBi will surely lose…
just my view
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### Author:  [@trader\_dude](https://tradingqna.com/u/trader_dude)
#### Post date: [May 31, 2018, 5:46pm UTC](https://tradingqna.com/t/derivative-exposure-based-on-income-tax-returns-for-retail-traders-outcome-from-latest-sebi-board-meeting/36279/124 "2018-05-31T17:46:03Z")
@Joy_Sen
Why don’t you take SEBI to courts if that is the case?.
I m sure your grandchildren’s grandchildren will win.
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