SEBI chairman Tuhin Kanta Pandey emphasises the importance of holistic regulation over options trading, advocating for reforms that advance liquidity, efficiency and participation across India’s capital markets, while avoiding segment-specific policies.
SEBI chairman Tuhin Kanta Pandey said India’s market rules cannot be shaped around options traders alone, arguing that regulators must keep a wider view on capital-market development, including foreign portfolio investors and the growth of passive funds. Speaking on the sidelines of a cyber defence event at the National Institute of Securities Markets campus in Patalganga, Pandey said policy should serve the market as a whole rather than the interests of one segment.
His remarks fit a broader pattern in recent months. In March, Pandey warned against blanket restrictions on retail participation in futures and options, calling for more measured, data-led regulation rather than what he described as a “sledgehammer approach”, according to Mint. In August, Business Standard reported that he dismissed speculation about ending weekly options expiries and said any reforms would be consulted on fully before adoption.
Pandey also said SEBI is moving quickly to overhaul the securities lending and borrowing mechanism, or SLBM, with a consultation paper expected soon. Business Standard and The Economic Times reported in November that the regulator had already set up a working group to review short selling and SLBM, which have been largely unchanged for years and are seen as underdeveloped compared with global markets.
The chairman said a stronger SLBM framework should also help the closing auction session, or CAS, which SEBI introduced to improve price discovery at the end of trading. He said the mechanism “is here to stay”, adding that the regulator is studying feedback and trading patterns, including expiry-day behaviour. According to Zee Business, SEBI believes participation has increased since CAS was launched and that volatility and gaps between the Sensex and Nifty have eased.
For investors, the message is that SEBI is unlikely to roll back recent market structure changes, but it remains open to targeted adjustments. The regulator appears focused on deepening liquidity, improving efficiency and broadening participation, while keeping options market reforms in line with larger goals such as passive investing and foreign inflows.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
