The Securities and Exchange Board of India on Tuesday stated in a tweet that it is not currently considering any proposal to link derivatives exposure, particularly options positions, to cash market holdings through a prescribed formula, as suggested by some recent media reports.
In a statement, the regulator emphasised that any regulatory change would follow due process, including transparent and public consultation. "No such proposal is under consideration," SEBI stated, addressing speculation around a potential shift in the regulatory approach to equity derivatives.
Apropos reports in some sections of media around supposed proposals to link option leverage limits to cash positions, it is clarified that no such proposal is currently under consideration.
July 8, 2025
As ever, SEBI will follow due process including transparent and public consultation…The clarification comes in the wake of reports earlier in the day suggesting SEBI was weighing a mechanism to link positions in options contracts to cash market positions. However, sources familiar with the matter had told NDTV Profit that no such proposal has been presented to SEBI's Secondary Market Advisory Committee. "The regulator is not looking at a concrete plan yet, and any further steps would require wider consultation and deliberation," the sources said.
The reports coincided with SEBI's release of a comparative study analysing the growth of equity derivatives trading relative to the cash market. The study, covering trading data between December 2024 and May 2025 across both major stock exchanges, was conducted to evaluate the impact of regulatory measures announced in October 2024 aimed at strengthening the equity index derivatives framework.
Findings from the report showed a decline in index options turnover on a year-on-year basis. Turnover dropped 9% in premium terms and 29% in notional terms compared to the previous year. Yet, when compared to figures from two years ago, the segment showed considerable growth, up 14% in premium terms and 42% in notional terms.
Activity by individual investors presented a mixed picture. Turnover from individual traders fell 11% year-on-year in premium terms but rose 36% over a two-year period. Meanwhile, the number of unique individual investors in the equity derivatives segment declined by 20% year-on-year, though it was still 24% higher than two years ago.
Despite the recent decline, SEBI noted that India continues to see robust trading volumes in equity derivatives, particularly index options, when compared globally.
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