The last two years suggest SEBI has lost direction — resorting to trial and error in a misguided attempt to artificially prop up the cash market. It is absurd for a regulator to cast itself as the guardian angel of investors, shielding them from losses through arbitrary curbs and restrictions, while failing — spectacularly and shamelessly — in the very areas where decisive action was actually required.
Jane Street allegedly extracted ₹48,000 crore from the options market over two years, and SEBI could not identify or act on it for the entire duration. Instead of addressing that failure head-on, what did the regulator do? It imposed extra margin requirements — but only on expiry day (ELM). This reflects a theoretical mindset with little connection to the practical realities of trading. By curbing volumes, SEBI is only increasing the probability of manipulation and wild price swings in thinner markets — a worse outcome for every trader.
The move to CAS (Close Auction Session) on derivatives expiry was another questionable decision, rolled out without first being tested in the cash segment. A Bank Nifty put option jumping from ₹6 to ₹1,000 in LAST 15 MIN OF expiry on 25th aug was a glaring example of just how disconnected SEBI’s bureaucratic approach is from actual market behavior. #SEBI the New Jane Street .
Now, it appears to be a matter of ego to admit the mistake — which is why the SEBI chief keeps repeating that CAS is here to stay and will “find its right place” over time. But that stance does not give SEBI the right to let traders lose money on expiry day, today, while the mechanism is still being fine-tuned.
And now comes the even more baffling talk of banning weekly expiries altogether. India has had the privilege of one of the most liquid options markets in the world — something many countries would envy. The US, by contrast, has moved toward daily options expiry. Yet here, SEBI seems intent on holding investors’ hands and teaching them to walk all over again, rather than trusting the market it is meant to regulate.