SEBI Rules Out Aptitude Tests for Retail Traders Amid Regulatory Concerns

SEBI Chief Tuhin Kanta Pandey dismissed the idea of mandatory aptitude tests for retail traders in the Futures & Options segment, citing impracticality and potential regulatory overreach. He emphasized the importance of individual financial autonomy and noted the challenges of enforcing such assessments. SEBI continues to discourage leveraged trading due to its high risks.

In a decisive move, the Securities and Exchange Board of India (SEBI), under the leadership of Chief Tuhin Kanta Pandey, has rejected industry calls for mandatory aptitude tests for retail traders in the Futures & Options (F&O) segment.

This decision comes after a significant study by SEBI revealed that 90% of retail investors incur losses in F&O trading, prompting suggestions for tests to protect investors. However, Pandey highlighted concerns of practicality and potential regulatory overreach.

As SEBI maintains its stance against leveraged trading, Pandey stressed the importance of respecting individual financial choices, while acknowledging the addictive nature of risky trading as a separate issue that requires attention. SEBI's existing certifications will continue to ensure informed and responsible market participation.

(With inputs from agencies.)