NSE CEO Ashishkumar Chauhan Calls For Minimum Qualifying Criteria For Derivatives Trading To Curb Retail Speculation

Mumbai, Feb 26: NSE Managing Director and CEO Ashishkumar Chauhan on Thursday made a case for “minimum qualifying criteria” for those participating in derivatives trading to prevent people from lower strata of society from wasting their money on speculation.

In light of capital markets regulator Sebi's finding that over 90 per cent of traders lose money in derivatives trading, the head of the IPO-bound stock exchange said no developing country can allow “lower strata citizens to waste their money, energy and resources on speculation.”

Call for tighter participation norms

Speaking at an event here, Chauhan proposed “minimum qualifying criteria” for participating in derivatives, in line with similar regulations in Singapore, the US and other countries, “so that lower strata people don't participate in the Indian derivatives market and lose money.”

Both the government and regulatory bodies have taken numerous measures to curb retail participation in the futures and options segments, aiming to funnel more money into the cash segment.

The government, in the 2026-27 Budget, raised the securities transaction tax in a bid to dissuade people from speculative trading.

The policy and regulatory measures have impacted volumes in the market. Stockbrokers and bourses derive a sizeable proportion of their revenues by executing trades.

Derivatives key for capital formation

Chauhan said the derivatives markets are important for capital formation in a country like India and their need will only go up in the subsequent years as management and transfer of risk assume importance.

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“At the same time, a developing country like India cannot allow over-speculation by the lower strata of the economy. Hence, more and more regulations will come from governments, regulators and exchanges to curb over-speculation till the time the perception of the lower strata of society doing over-speculation continues,” he stressed.

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