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

[pihu]

No idea! But the motive is to kick out small retail investors and traders from the market so that there is no other option left except mutual funds.

sir if i have 1L capital and i am making just 4000rs profit monthly by trading on it(ok without using any leverage),i am making 48,000rs yearly profit.
which mutual fund or government policy or bank could give me 48% growth rate?
government cant do my vikas and when i want to do my own vikas,why sebi ruled by modiji has a problem now?

sorry to say this sir,i will support corrupt congress in 2019

 

[MaxX]

Let's see how things pan out.. with retailers having ~50% of volumes I doubt they would do anything to shock the system too much/affect people with larger accounts. An educational test would have been a better idea though IMO.

 

[headstrong007]

Let's see how things pan out.. with retailers having ~50% of volumes I doubt they would do anything to shock the system too much/affect people with larger accounts. An educational test would have been a better idea though IMO.

Already the South Korean Market did the same and killed there market. Link posted above (below link again). SEBI will do it unless enough protest is happening.

http://m.koreaherald.com/view.php?ud=20170119000602#cb

"Only two things are infinite, the universe and human stupidity, and I'm not sure about the former." - Albert Einstein

 

[pihu]

Do you have any valid link or document for 2 Cr? Probably it is true in the Indian context, but I did not get enough proof in the net. So, I got that USD 1 million from international HNI requirement.

dont have any link but i remember reading it on sebi site where they said-
individuals with over Rs. 2 crore investible surplus are considered to be HNIs
and for international individual HNI its over 6.5crs using P-Note.

 

[Smart_trade]

same query i have sir @headstrong007 @Smart_trade dada
they planning to kill equity intraday scalping,speculation too?
we wont get 10 to 15X margin in cash market?
if i have 1L with broker means i could buy only 200 shares if stock price is 500rs?

Let the rules be specified by SEBI.Intraday scalping is already dead when STT was introduced.But scalpers did not stop trading ,they shifted to day and swing trading. We don’t know how much exposure they are going to allow so difficult to make any comments on how many shares will be allowed for trading.

Smart_trade

 

[pihu]

An educational test would have been a better idea though IMO.

sir,there are many seminar conducted by nse+sebi,but they themselves dont know what is what
as per NSE,you could make only 15% return trading Nifty and that is what they show in slideshows

 

[afin]

Here is the effect of similar kind of restrictions of equity exposure in Korea's derivatives market.
SEBI's proposal would kill Indian Market too. Currently, 40-50% volumes are provided by small retail traders.

http://m.koreaherald.com/view.php?ud=20170119000602#cb

thanks to afin's #SEBIagainstRetailTrader

Specially discount brokers must also build protest ASWAP. Bcoz their main client base is small retail clients trading under 1 lakh capital. Such clients mostly trading with leverages.

If SEBI really wants to protect the small retail traders then the best way is to decrease lot size.

@headstrong007 like you had suggested, I am copy pasting this post I made on the day trading thread.


Point I can think of that can be added when thinking of making a set of structured arguments in the letter to Sebi.

Others can please think of more points. Text below:

India's ease of doing business rank is only just improving. We were ranked 130 in 2017 and jumped to 100 in 2018 (source:http://pib.nic.in/newsite/PrintRelease.aspx?relid=173116) The current SEBI proposal goes against the tenets of the ease of doing business because trading is considered as a business. Gains from F&O trades are categorized into the "Business Income" head of the ITR form and it is done for a reason. If the current SEBI proposal goes through, it would be creating a hinderance for all the retail traders concerned, from an ease of doing business perspective. From that point alone, the move is retrograde in nature.

If the other members of the forum can think of other such pertinent points, also suggested by @sanju005ind we can create a structured bunch of logical arguments that would strengthen the case. Over to you guys.

 

[afin]

Do you have any valid link or document for 2 Cr? Probably it is true in the Indian context, but I did not get enough proof in the net. So, I got that USD 1 million from international HNI requirement.

Sebi explicitly mentions that if you want to open a PMS, one needs to be having a minimum net worth of INR 2 cr. Perhaps it was picked up from there.

 

[TraderGYO]

No hope, the rule is going to be the same for all except HNI. The proposal is only 40-50% it of the percentage of your net worth.
And the most disturbing thing is SEBI is calculating the turnover of option with prem+strike. So, options traders may not be safe.

Options sellers not buyers will face the heat in that case. Isn't that the case?

 

[headstrong007]

Options sellers not buyers will face the heat in that case. Isn't that the case?

I think SEBI has the much more detailed plan.
Do u read the above-posted link what happened in Korea in similar case? Just read. SEBI is just copying it.
They did something for option buyers also.
They increased the lot size for the Index option so much high, that most of the small retail trader does not able to trade it.
As a result, their derivative turnover dropped by 65% and the market lost momentum. Their market was DEAD for a period of 4-5 years after such restrictions. So, will be ours. Finally, they removed many of such restrictions in 2017 end then their market jumped up. Stupid fellow.

SEBI-NSE already did it intentionally to INDIA VIX so that no one can trade it. It is out of small retailers hand and smart money don't take the opposite side. So the contract is practically useless with no trading volume.