Mumbai, Aug 21 Markets regulator the Securities and Exchange Board of India (SEBI) is exploring ways to increase the tenure and maturity of equity derivatives contracts, its Chairman Tuhin Kanta Pandey said on Thursday.
In recent years, derivatives trading on Indian stock exchanges has grown rapidly, with a large number of retail investors also participating.
To address the risks of excessive speculation, SEBI had earlier restricted the number of contract expiries and raised lot sizes, making such trades costlier and more disciplined.
Pandey said that SEBI will now work with the Ministry of Corporate Affairs and stock exchanges to set up a regulated platform carrying reliable information on unlisted companies planning to go public.
Such a system would make it easier for investors to track the performance of pre-IPO firms before deciding to invest in them.
The regulator’s latest move reflects its focus on balancing investor protection with the growing appetite for derivatives and IPO investments in Indian markets.
Meanwhile, earlier this week, SEBI released a consultation paper proposing easier rules for very large companies to launch their Initial Public Offerings (IPOs), including relaxed minimum public offer requirements and more time to meet public shareholding norms.
At present, very large companies have to sell a big part of their shares to the public when they list on the stock market.
This often leads to very large IPOs, which are difficult for the market to handle at one time.
SEBI has now suggested a new system that will reduce the immediate pressure on companies to sell so many shares at once. However, they will still need to meet the public shareholding rules gradually over time.
Another proposal is to reduce the share reserved for retail investors in IPOs above Rs 5,000 crore. Instead of the current 35 per cent, only 25 per cent of the shares will be set aside for small investors in such big issues.
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