Reasons are debatable. There are pros and cons ...lot can be argued in favour and against. But it is futile to argue on something which is inevitable.
The decision of charging SEBI tax ( it came in 1992) was also contested in Mumbai High Court and Supreme Court. The courts ruled in favour of SEBI.
This decision if contested in Courts by way of court petition, I am sure it will be struck down. Let some investor/trader bodies try it. Lot size is administrative decision between SEBI and Stock Exchanges and Courts never interfere in such administrative decisions.
Smart_trade
The decision of charging SEBI tax ( it came in 1992) was also contested in Mumbai High Court and Supreme Court. The courts ruled in favour of SEBI.
This decision if contested in Courts by way of court petition, I am sure it will be struck down. Let some investor/trader bodies try it. Lot size is administrative decision between SEBI and Stock Exchanges and Courts never interfere in such administrative decisions.
Smart_trade
Arguments would fly both ways as said by you, both for and against! SEBI would say they increased the size to discourage the Small investor from speculating ! It can also be argued that there is no set crieteria who trades in FnO, so by increasing the size SEBI is in fact exposing small traders to bigger risk!
My contention is simple : FnO are instruments for hedging, so why make it an instrument useful for FII, DII or HNI's ! Why not also Small Investors? Why not allow them to hedge their portfolio too??
We do not ban Smoking, alcohol and even betting in Horse races which are all bad for citizens ! On tobacco we have is a Warning and all that grew big was the SIZE of the warning message! Let there be appropriate Warnings in case of FnO too , why not increase the size or frequency of warning! Let there be a BOLD sized warning on all FnO Contracts issued!
The fact is that the Lot size should be reduced ! Persons with appropriate means should fight it out ! I even told my Broker to write to SEBI, FM and NSE but they are sissies, fear that there would be retribution if they do it!
If it can be done, though an impossible thing I know, but suppose it is done : All NSE members write to NSE giving a Notice to surrender their FnO membership from the date the New Lot sizes are applicable !