Sebi board meeting: Tightened rules for derivatives, finfluencers; easier delisting norms likely: Report

Capital markets regulator Securities & Exchange Board of India (SEBI) is expected to discuss and approve norms related to derivatives trading, investment advisors and finfluencers, among several other things during its board meeting scheduled for June 27, a report said.

Sebi board may tighten rules for stocks to be eligible for derivatives trading. Additionally, with an aim to prevent market manipulation, the regulator is also likely to ask brokers and mutual funds to stop enlisting unregistered financial influencers for their marketing campaigns, Reuters reported, quoting sources with direct knowledge of the matter.

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Sebi had issued a discussion paper earlier this month which said that the stock derivatives should have sufficient liquidity and trading interest from market participants.

Derivatives trading has been gaining momentum among retail traders and the notional value of options traded in India more than doubled in FY24 to $907.09 trillion from the year before.

Meanwhile, the number of influencers giving financial advice on social media platforms has also increased drastically due to the increased retail investors’ participation in equity markets.

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Sebi has proposed that brokers and mutual funds stop associating with unregistered influencers in order to ensure these influencers do not mislead investors.

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,” the Reuters report added quoting one of the sources.

Moreover, Sebi board is also expected to consider changes and simplify the delisting rules for companies from stock exchanges, the report said. 

Other reports also said that Sebi is expected to approve an application of the International Private Equity and Venture Capital Valuation Guidelines (IPEV) for unlisted securities held by alternative investment funds (AIFs).

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