SEBI Chairperson Confirms No Immediate Additional Restrictions on F&O After STT Hike
SEBI has clarified no new immediate measures on futures and options trading
Securities and Exchange Board of India (SEBI) Chairperson Tuhin Kanta Pandey has ruled out any immediate additional restrictions on the futures and options (F&O) segment, seeking to calm market concerns following the recent hike in Securities Transaction Tax (STT) announced in the Union Budget.
Speaking at a public event, Pandey said the market regulator is not considering fresh curbs on derivative trading in the near term and will continue with the existing regulatory framework. He emphasised that SEBI prefers a calibrated, data-driven approach and will closely study the impact of the STT increase before taking any further policy decisions.
The clarification comes after the government raised STT rates on equity derivatives, a move widely seen as an attempt to curb excessive speculative activity in the fast-growing F&O market. The tax on futures contracts and options premiums was increased, triggering speculation that SEBI could follow up with tighter norms such as limiting weekly expiries or imposing additional participation restrictions.
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Addressing these concerns, the SEBI chief said there are no immediate plans to introduce such measures or to discontinue weekly F&O expiries, which play a significant role in market liquidity and trading volumes. He added that any future interventions would be based on evidence and stakeholder consultations rather than short-term market reactions.
The assurance was welcomed by market participants, with capital market and brokerage stocks registering gains as fears of abrupt regulatory tightening eased. Analysts noted that regulatory stability is crucial at a time when traders and institutions are still assessing the financial and behavioural impact of the higher transaction tax.
SEBI’s stance underscores its broader regulatory philosophy of balancing market integrity and investor protection with the need to avoid sudden disruptions. While the regulator will continue monitoring the derivatives segment closely, Pandey’s remarks suggest that no immediate structural changes to F&O trading are on the horizon following the STT hike.
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