Regulator's concerns pertain to pockets of speculation, not entire derivatives market: Tuhin Kanta Pandey
GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims·
Why in news
Sebi clarified that its recent measures against derivatives market speculation target specific pockets of activity rather than the entire market to balance risk mitigation with market functionality.
Background
Sebi is reviewing settlement regulations to simplify processes and reduce litigation. The regulator is also examining promoter norms under the ICDR and LODR regulations to prevent window dressing practices.
Facts for Prelims
- BodySebi: The primary regulator for capital markets in India
- FactMTF: Margin Trading Facilities are identified as a source of excessive speculation
- Act / BillICDR and LODR: Regulations under which Sebi is examining promoter norms
For Mains
Q. Discuss the regulatory challenges in curbing excessive speculation in the derivatives market while ensuring market liquidity and investor protection.
Dimensions to cover in your answer
- Regulatory arbitrage: Balancing risk-mitigation measures with the need for market liquidity
- Transparency gap: Addressing window dressing practices through stricter promoter norm enforcement
- Data-driven oversight: Utilizing granular data analysis to target specific speculative pockets
Keywords: Market Integrity · Regulatory Oversight · Speculative Trading · Investor Protection · Window Dressing
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