XM does not provide services to residents of the United States of America.

India's markets regulator to tighten stock derivative, financial influencer rules on Thursday



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>UPDATE 1-India's markets regulator to tighten stock derivative, financial influencer rules on Thursday</title></head><body>

Adds attempt to contact SEBI in paragraph 4

By Jayshree P Upadhyay

MUMBAI, June 25 (Reuters) -India's markets regulator is likely to tighten rules for stocks to be eligible for derivatives trading and ask brokers and mutual funds to stop enlisting unregistered financial influencers for their marketing campaigns, two sources with direct knowledge of the matter said.

These steps, aimed at preventing market manipulation following the explosive growth in trading of complex financial instruments, are likely to come at the Securities and Exchange Board of India's (SEBI) board meeting on Thursday, said the sources, who declined to be named as they are not authorised to speak to the media.

Earlier this month, the markets regulator said in a discussion paper that stock derivatives should have sufficient liquidity and trading interest from market participants, a move expected to weed out derivatives linked to illiquid stocks.

SEBI did not immediately reply to a Reuters email seeking comment.

The notional value of options -- derivative contracts that give investors the option of buying or selling a security at a fixed price at a future trade -- traded in India more than doubled in 2023-24 to $907.09 trillion from the year before.

Most of the options trading in India happens on index option contracts. While the regulator has so far not taken any steps to regulate index options, it is considering a series of technical tweaks, Reuters had reported earlier this month.

A surge in retail investors' participation in equity markets during the COVID-19 pandemic led to a proliferation of influencers pushing financial advice on social media platforms.

To ensure financial influencers do not mislead investors, the markets regulator has proposed that brokers and mutual funds stop associating with unregistered influencers.

More broadly, the regulator has formed a group of exchanges, brokers and mutual funds this week "to suggest any additional changes needed to remove risk of manipulation and ensure retail investors are protected against risks in options contracts," one of the sources said.

On Thursday, the board of the markets regulator will also consider changes to delisting rules to make it easier for companies to exit from stock exchanges.



Reporting by Jayshree P Upadhyay; Editing by Mrigank Dhaniwala

</body></html>

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.