Sebi Charts New Course for Equity Derivatives Amid AI Evolution

Sebi Chairman Tuhin Kanta Pandey announced plans to improve the tenure and maturity of equity derivatives to better serve investors. The market regulator aims to strengthen the cash equities market and improve derivative quality. AI's growing role in finance introduces opportunities and challenges, demanding careful regulation.

Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey announced strategic measures to enhance the tenure and maturity of equity derivatives products, aiming for a balanced approach. The move seeks to better serve hedging needs and support long-term investments.

Pandey highlighted the fast-paced growth in cash market volumes, which have doubled over a three-year span. He emphasized that strengthening the equities market's depth is essential, while improving derivative products' quality.

At the FICCI Capital Market Conference 2025, concerns were raised about the dominance of ultra-short-term derivatives, which may destabilize India's capital markets. Additionally, the integration of artificial intelligence (AI) presents both opportunities and challenges, necessitating regulatory attention towards data protection and cybersecurity.