Call for Stricter Regulations in Derivatives Trading

Ashishkumar Chauhan, NSE's managing director, advocated for minimum qualifying criteria for derivatives trading to protect lower economic strata from financial loss. With high speculation risks, he emphasized aligning regulations with global standards. Chauhan noted that these markets are crucial for capital formation, yet require cautious oversight.

Ashishkumar Chauhan, the managing director and CEO of NSE, highlighted the urgent need for implementing 'minimum qualifying criteria' in derivatives trading. His call comes as a proactive measure to safeguard individuals from lower economic strata, often susceptible to financial losses through speculative trading practices.

Chauhan's remarks were influenced by capital markets regulator Sebi's findings, indicating that over 90% of traders incur losses in derivatives. At a recent event, he suggested that aligning India's market regulations with countries like Singapore and the US could prevent economically vulnerable populations from engaging in high-risk speculative activities.

While derivatives play a significant role in India's capital formation, Chauhan stressed the necessity of additional regulatory measures. These would curb excessive speculation and manage risk more efficiently, ensuring that the focus remains on sustainable economic growth.

(With inputs from agencies.)