SEBI's new move to cut retailers participation in F&O!

sridhga

Well-Known Member
For more clarity on sanity, I strongly recommend that you read the SEBI regulations on Criteria for a "Fit and Proper Person", 2004. Here's an excerpt from the criteria for determining such a person from the SEBI website:

(1) For the purpose of determining as to whether an applicant or the intermediary seeking registration under any one or more of the relevant regulations is a �fit and proper person�, the Board may take account of any consideration as it deems fit, including but not limited to the following criteria �

(a) financial integrity;

(b) absence of convictions or civil liabilities;

(c) competence;

(d) good reputation and character;

(e) efficiency and honesty; and

(f) absence of any disqualification to act as an intermediary as stipulated in these regulations.

The link contains more details on this subject.



I can see that you are trying to bring sanity to the conversation.:p
 

Tejas Khoday

Co-Founder & CEO, FYERS
I can see that you are trying to bring sanity to the conversation.:p
Haha! Because it seems like many have developed an Anxiety Syndrome. Although the nature of regulations is portrayed as archaic, they may turn out to be progressive. After all, I don't think the vast majority of traders will stop trading because of a net-worth certificate requirement or a mandatory exam that is to be passed in order to trade in derivatives. I am convinced that traders will continue to trade as long as there are opportunities in the market. I don't foresee an outright ban on dealing in derivatives or anything extreme of those sorts.
 
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headstrong007

----- Full-Time ----- Day-Trader
ASSOCIATION OF NATIONAL EXCHANGES MEMBERS OF INDIA
http://www.anmi.in/

“While we understand SEBI’s concern on the issue of product suitability framework that needs applied to F&O trading, at the very outset we would like to point out that India is uniquely adaptable to understanding the F&O markets by the masses as the country boasts of the oldest Stock Exchange of Asia, as well as years of experience with the unique *Badla” system that has evolved as the F&O market as we see today. Further, the entire F&O market is regulated, exchanged traded with standardized contracts and risk management norms that are by now well understood by the general masses.


Application of product suitability framework to the entire spectrum of market participants would not serve the interests of the capital markets. There exist a multitude of client types in the Indian equity markets be it Retail, FINI, Corporates, Institutions, etc. A common approach with respect to product suitability for all would seriously damage market liquidity and efficiency.

Therefore, at the very beginning, there is a need to make a clear distinction between participants who have both the knowledge and the financial ability to participate in the derivative markets and those who don’t."

https://www.anmi.in/upload/anmi_work/1531397158ANMI_Note_on_Product_Suitability.pdf


*************

“a cap on Margin Exposure (as applied to open positions) equivalent to a multiple of 5 times of NET WORTH is
suggested” by ANMI
 
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headstrong007

----- Full-Time ----- Day-Trader
Haha! Because it seems like many have developed an Anxiety Syndrome. Although the nature of regulations is portrayed as archaic, they may turn out to be progressive. After all, I don't think the vast majority of traders will stop trading because of a net-worth certificate requirement or a mandatory exam that is to be passed in order to trade in derivatives. I am convinced that traders will continue to trade as long as there are opportunities in the market. I don't foresee an outright ban on dealing in derivatives or anything extreme of those sorts.
According to various reports, SEBI already said it is not possible to apply mandatory exam in India.
I doubt about how many small traders(mostly higher percentage of non-profitable traders) will bear the extra cost of mandatory Net Worth Certificate from CA.
 

bpr

Well-Known Member
Very valid concerns! I can't comment on the privacy policies of other brokers but we never leak data or indulge in any practices which can represent a conflict of interest.
No broker does it ...it always happens without their knowledge ...
How will you know if your sales guy give info to outsider ??
 

Tejas Khoday

Co-Founder & CEO, FYERS
According to various reports, SEBI already said it is not possible to apply mandatory exam in India.
I doubt about how many small traders(mostly higher percentage of non-profitable traders) will bear the extra cost of mandatory Net Worth Certificate from CA.
It's a demand-supply thing. The cost of net-worth certificates for traders will fall drastically IMO.
 
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Tejas Khoday

Co-Founder & CEO, FYERS
No broker does it ...it always happens without their knowledge ...
How will you know if your sales guy give info to outsider ??
1. No comments on that. Sure, let's give the benefit of doubt to all brokers.

2. There are several measures that can be taken to avoid information leaks. At the sales exec level, leaks can be tracked by the lead trail. Other than that, it's about preventing hacks and by following high standard operating procedures.
 

headstrong007

----- Full-Time ----- Day-Trader
It's a demand-supply thing. The cost of net-worth certificates for traders will come down drastically IMO.
Discount Brokers can think of that. They can arrange CAs and make a good deal based on large numbers of interested clients (along with brokers commission). :)