NSE vs BSE: How Sebi’s curbs are reshaping India’s options market
Subscribe to enjoy similar stories. The Securities and Exchange Board of India (Sebi) introduced curbs on options trading with the aim of cooling down market frenzy on expiry day. However, instead of merely slowing down trading excesses, these measures have triggered fresh rivalry between the NSE and the BSE.
Despite the regulatory crackdown, the overall impact on trading volumes has been minimal. Data from the two stock exchanges reveal that index and stock options' premium turnover declined by less than 3% in the six months leading up to March 7, compared to the corresponding period in the previous fiscal year. A closer look at the numbers shows that this limited drop is largely due to a surge in options trading on the BSE, albeit on a significantly lower base.
While the NSE has witnessed a sharper decline in trading volumes, the steep rise in BSE’s turnover has significantly offset the overall impact of Sebi’s restrictions. Incidentally, Sebi's wholetime member Ananth Narayan recently stressed that Sebi was not against any market segment, but simply wanted to curb excesses on weekly option expiry days. Also read: Mint Explainer: How Sebi's new proposals aim to curb risks in the derivatives market The data highlights the growing competition among stock exchanges as they vie for a larger share of the derivatives market.
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