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

Here is the pdf of today's board meeting.
I am yet to read, but posting it here first.

Headstrong bhai is missing. :p
Hi Everyone
Please read that document carefully.Go through point 12
The Board considered the recommendations of the Committee on Fair Market Conduct and the public comments received thereon. .

On the issue of use of front entities or “mule accounts” for engaging in fraudulent transactions and related recommendations on affordability index, it was decided to discuss this matter further with stakeholders.

I just would like to take your all attention about those points.Though now we can trade in peace.But we must also remember that this net worth thing is not gone for forever..the sword is still hanging on our head still.As SEBI mentioned in this document, RELATED RECOMMENDATIONS ON AFFORDABILITY INDEX, IT WAS DECIDED TO DISCUSS THIS MATTER WITH STAKEHOLDERS..So this afforadabilty index thing is related to exposure given to retail traders ..this RELATED RECOOMENDATION is about the same thing..we should all read that FAIR MARKET CONDUCT COMMITEE REPORT..& this affordabilty index is all related to retail traders.
I am not make you all afraid but just want to keep your attention towards problem.Though we can enjoy now our trading..but is khushi main humey yeh nahi bhoona chahiye ki museebat khatam nahi hui hai & we should not weaken our attack now to think that we have already was just an ambush that we won, war is still ON..

I just want to tell that we should keep fighting & put our opposition & keep writing emails & letters to SEBI TO show our problems & points & oppositions about those points which is mentioned in FAIR MARKET CONDUCT COMMITEE report .we should not put our arm down if we want to go our buisness smoothly.
I think they asked for public comment on commitee report..we should go to SEBI site & make our comments through email & REGISTERED LETTERS TO SEBI & registered our oppositions on those Recommendations .as Sebi mentioned that it was decided to discuss this matter further with stakeholders.
WE should concentrate on our trading but we must write emails & registered letters to SEBI once in every month , if not possible every week.AS many traders as possible should do this, so we can save our buisness in coming monthes & coming years also.this is a beautiful buisness , we dont want ki SEBI KI NAZAR IS KO LAGEY, so please all traders dont put our gun down ,war is not over.jab tak poori jeet nahi jatey, tab tak tayyari rakhni hogi.
I request head strong Sir, please let us know the way to keep proceedings & educate all traders that how can we all do to registered our protest to those recommendation of commitee .


----- Full-Time ----- Day-Trader

Already shared the various ways of protest here,

Here is the article by NSE chief, I have shared the link here but not full article was published in net.

Posting the actual paper document from my hard disk (saved earlier).

vikram limaye.jpg

It's good to see NSE is supporting traders, they are also worried about volume and liquidity too.
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This is SEBI's new move to cut retailer's participation,in the name of "protection of retail trader".....
Yes it is discouraging but not to worry!

Index derivatives (NF/BNF) won't be affected as exchanges will be cash settling them after expiration. Only the long ITM options of to be physically settled stocks as circulated earlier will be affected. And Upstox will ensure to square-off a day prior to the expiration of such open contracts as they like other brokers are not in the favor of physical settlements. In order words, these steps are taken to reduce unprecedented speculation.

Anyways, no seasoned Option trader will like to buy Options that expire within a week because, as the expiration date approaches the rate of premium erosion increases with each day's Theta decay. Time is always against an Option buyer. No margin changes made for Option sellers.

In their last board meeting, SEBI made no discussion on restrictions to be levied on the basis of participant's Net worth. SEBI took a retail friendly approach by capping MF expense ratio @ 2% and by a proposal to enforce trialling commission instead of an upfront commission system alongside some KYC easing for FPIs. These steps were definitely taken to lure more and more investors to take SIP/MF route. From here it is evident that SEBI will not play with these sensitive matters before the next year election. Now what stance SEBI takes in future is something which only time can tell us. They might have simply scrapped out the idea as no broker was willing to take the onus, or, they will strategically bring it up again after implementing such norms to show that they only think good for the retail (being sarcastic).

Till then,
Happy Trading !
Yesterday, various key decisions taken at Sebi’s board meet to curb retailers participation in F&O.


I want to share, some inner thoughts which come to mind...

SEBI wants to move F&O volumes to CASH. Who will be most benefited by this? Ans is Govt.
STT is much higher in cash market than F&O. Moreover, in cash, a swing trading for few days will cost much more STT as it is the delivery trade.
Govt just introduced 10% on LTCG tax on shares. Now is that necessary to impose more tax burden to traders in terms of more STT, especially for 90-95% of losing traders? I know good profit makers don't care so much, but they are very less in percentage.

SEBI is thinking two way to shift the volumes:-

1. Idea 1.-> "Individual investors may freely take exposure in the market(cash and derivatives) up to a computed exposure based on their disclosed income as per their Income Tax Return(ITR) over a period of time. "

I think this logic has many a flaw, as in India only a few people under tax bracket. Anyone can make disclosed income is just below the maximum limit to file a compulsory ITR return, say 2.5 lakh. So it is difficult to ban retailers from trading F&O completely. Also, it will be very difficult for RMS for brokers to maintain such individual limits.

In the same way, there will be a maximum limit for the higher income traders group too. How they can limit volumes to few successful pro traders!? Or there will be the different rule for them, like diff income tax slabs.

Anyway, this is very tough to implement, so SEBI has another idea, this is easy to implement and more dangerous.

2. Idea 2. ->
"Accordingly, existing criteria like market wide position limit and median quarter-sigma order size shall be revised upward from current level of INR 300 crore and INR 10 lakh respectively to INR 500 crore and INR 25 lakh respectively. An additional criterion, of average daily ‘deliverable’ value in the cash market of INR 10 Crore, has also been prescribed. "

This is more dangerous as "average daily ‘deliverable’ value in the cash market of INR 10 Crore" will remove many good traders friendly stocks from F&O section like DISH TV etc. SEBI indirectly trying to ban 'positional shorting' also in as many stocks as possible by limiting the F&O list also. Many F&O will fail to meed 10Crore criteria.

Another easy but really dangerous for retail traders is bigger lot size of 25lakh. With bigger lot size the chance of wipeout is faster without much experience or time spent in the market. Also, small capital swing traders will try to do intraday(cash) trading which will be more dangerous to them. Everyone know day trading is the most difficult way to make money bcoz of much more short-term noises (at least than few days positional swing trading). So why SEBI is forcing retail traders to trade in intraday cash (as delivery trading attached with much more STT)? Also, in absence of F&O intraday shorting in huge volumes in low liquid stocks can attract huge penalty(due to short delivery) to retail traders! Short delivery can attract huge loss in auction market including the penalty. I really doubt SEBI is really concerned about the risk exposure of retailers money?

If SEBI really wants to protect retailers, then the easiest way is to reduce lot size, this will provide more liquidity to the market too. But it seems the collection of more STT and shifting the volume in cash is the hidden agenda!

If not what else!
Share your views, traders........

This time SEBI is serious,
SEBI already reaches out to the exchanges and large brokerage houses for suggestions. So, don't take it lightly.

Right know I amn't aware about the impimation of above changes proposed by
such a responsible authority *SEBI*

At first glance it all look like a
** Childish Play ***

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