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VOL. I · EST. 11.2025 
SatyaDheesh
सत्याधीश
India's Ground Truth Record
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Sebi proposes major overhaul of derivatives rules to simplify compliance for exchanges

GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims·

Why in news

Sebi proposed a major overhaul of derivatives market regulations to simplify compliance and enhance market efficiency by removing specific CTM mechanisms and outdated disclosure norms.

Background

Sebi proposed removing the 'Close to the Money' (CTM) option series mechanism in commodity derivatives and reducing mandatory Product Advisory Committee meetings for non-agricultural contracts. The proposal includes replacing newspaper disclosures with website-based disclosures and granting exchanges flexibility to adjust expiry dates during disruptions.

Facts for Prelims

  • BodySebi: Securities and Exchange Board of India
  • FactProposed removal of 'Close to the Money' (CTM) option series mechanism in commodity derivatives
  • FactProposed replacement of newspaper disclosures with website-based disclosures by exchanges
  • FactPublic comments on the proposed changes are invited until June 4th

For Mains

Q. Discuss how simplifying regulatory compliance for derivatives markets can enhance market efficiency and investor protection in the Indian financial ecosystem.

Dimensions to cover in your answer

  • Regulatory arbitrage: Balancing reduced compliance burdens with robust oversight of high-frequency trading
  • Information asymmetry: Transitioning from physical newspaper disclosures to digital platforms for real-time transparency

Keywords: Market Efficiency · Regulatory Compliance · Derivatives Trading · Transparency · Capital Market Oversight

Read the full news →Source: Economic Times ↗Also: GS2 · Transparency, accountability & RTI

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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.