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19 Nov 2024
The Securities & Exchange Board of India (SEBI) is expected to address various norms, including those related to derivatives trading, investment advisors, and financial influencers, during its board meeting on June 27. According to a report, SEBI might implement stricter rules for stocks eligible for derivatives trading and mandate that brokers and mutual funds stop using unregistered financial influencers for marketing campaigns to prevent market manipulation.
A discussion paper issued by SEBI earlier this month highlighted that stock derivatives should have sufficient liquidity and trading interest from market participants.
Retail trading in derivatives has surged, with the notional value of options traded in India more than doubling in FY24 to $907.09 trillion from the previous year. Concurrently, the number of financial influencers on social media has significantly increased due to the rise in retail investor participation in equity markets.
To prevent misleading information, SEBI proposed that brokers and mutual funds cease their associations with unregistered influencers.
A group comprising exchanges, brokers, and mutual funds has been formed to suggest additional changes to mitigate manipulation risks and protect retail investors in options contracts.
The SEBI board is also expected to consider simplifying the delisting rules for companies from stock exchanges.
Additionally, reports indicate that SEBI may approve the 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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