SEBI Chief Warns Against Speculative Bets In F&O

SEBI Chief Warns Against Speculative Bets In F&O

Displays concerns over the youth losing massive amounts on trading

The Securities and Exchange Board of India (SEBI) has stated that it is ‘compelled’ to warn against speculative bets in the segment of futures and options (F&O), as it has become a ‘macro issue’, affecting the economy.

While speaking at the SBI Mutual Funds event, the SEBI chairperson Madhabi Puri Buch explained that the household financial savings were entering speculative bets for capital gains. As a result, the youth was losing whopping amounts on such trades.

She stated, “It has gone from being a micro issue of an investor to a macro issue of the economy. Therefore, we felt compelled to advise.”

Research carried out by the capital markets regulator had noted that investors lost in 9 out of 10 trades in the F&O segment. Starting from a level where it insisted on disclosing risks, SEBI has been trying to dissuade investors from doing so.

The chairperson apprised that SEBI altered because of the data on the segment’s huge rise. It reminded people of its responsibility for market development.

Buch clarified that recently the SEBI chose to flag asset price froth in certain equity segments because the stakeholders were not doing their jobs. She was confident it was the right time to put a stop to it.

She added that fin-influencers indulged in regulatory arbitrage by registering as investment advisers. Therefore, the market regulator would soon come up with a consultation paper.

On the event to mark the fund house's assets under management crossing Rs.10 lakh crore, Buch said that the growth in the industry would ensure that in the next three years, the AUM doubled to Rs.20 lakh crores.