NSE CEO pitches for minimum qualification criteria for derivatives trading

NSE’s Managing Director and CEO Ashishkumar Chauhan on Thursday advocated ‘minimum qualification criteria’ for those participating in derivatives trading to prevent people from lower sections of society from wasting their money on speculation.In light of capital markets regulator Sebi’s finding that more than 90 percent of traders lose money in derivatives trading, the head of the IPO-linked stock exchange said no developing country can allow “citizens from the lower strata to waste their money, energy and resources on speculation”.

Speaking here, Chauhan proposed “minimum qualification criteria” for participation in derivatives, in line with similar regulations in Singapore, the US and other countries “so that people from the lower strata do not participate in the Indian derivatives market and lose money.”

Both the government and regulators have taken numerous measures to curb retail participation in the futures and options segment, with the aim of channeling more money into the cash segment.

The government has increased taxes on securities transactions in the 2026-2027 budget in a bid to discourage people from engaging in speculative trading.

The policies and regulatory measures have had an impact on the volumes in the market. Stock brokers and exchanges generate a significant portion of their revenue from executing trades.

Chauhan said derivatives markets are important for capital formation in a country like India and their need will only increase in the coming years as risk management and transfer become more important.

“At the same time, a developing country like India cannot allow excessive speculation by lower sections of the economy. Therefore, there will be more and more regulations from governments, regulators and stock exchanges to curb speculation until the perception of lower sections of the society about speculation continues,” he pointed out.