Regulator's concerns pertain to pockets of speculation, not entire derivatives market: Tuhin Kanta Pandey

Tuhin Kanta Pandey, chairperson of the Securities and Exchange Board of India (Sebi), has emphasized a nuanced approach to regulating the equity derivatives market, focusing on specific areas of speculation rather than imposing broad restrictions. In an interview marking his first year in office, Pandey highlighted the importance of maintaining a market-friendly environment while ensuring investor protection. Sebi has introduced measures aimed at curbing excessive speculation, including stricter margin requirements, particularly on expiry days. These initiatives are part of a larger effort to streamline regulations and reduce compliance burdens in the capital markets. Pandey noted that the regulator is adopting a principle-driven approach, prioritizing data analysis over arbitrary targets, with the goal of fostering transparency and responsible market behavior. He acknowledged the need to balance regulation with market liquidity, cautioning against drawing parallels with countries like China and South Korea that have faced liquidity issues due to stringent measures. As Sebi moves forward, it aims to create a responsible trading environment while recognizing the legitimate role of derivatives in risk management and price discovery.