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

[trader2017]

I think and hope this is a false news, SEBI cant take such hard rules to apply suddenly on market

i think too..sebi cant frame such meaningless and laughable rules..lets wait for the official announcement

 

[headstrong007]

will it be possible to trade intraday with cash?

Will you trade with similar enthusiasm with no leverage or minimum leverage or limited maximum exposure/leverage based on 40% of your last 3 years return?

They will try their best to prevent you from trading. They, want your money for the mutual fund and SIP only.

 

[vikas2131]

I think so, as there is already a report that some SEBI official said exposure is only 40-50% of networth.
But, my fear is not my trading capital but the possible liquidity crisis,
if SEBI set even min capital required for F&O trading to say, at least 5 lakh capital (which is very much likely). Then most of the F&O participant is out of the market. Option segment will be dead first then the futures will follow soon, then the rest of the market(equity cash).

i have not read anywhere that minimum account will be set. it this was case , it would have been out now so not expecting it but liquidity still going to be the problem.

 

[headstrong007]

i have not read anywhere that minimum account will be set. it this was case , it would have been out now so not expecting it but liquidity still going to be the problem.

It is a probability, as some traders will definitely use the multiple accounts to bypass the rule.
Yes, such thought was published in one of the article in economic times (it was some editors personal view).

I think SEBI can do anything! Don't trust SEBI. SEBI is definitely not working in favor of investors interest. Just take following example!
SEBI clearly rejected the idea of certification for F&O trading (which is followed Globally), it was published in moneycontrol.
Networth can come from non trading related field. So a big networth person can still lose big with SEBI's new regulation as nowhere knowledge is a deciding factor.

But, SEBI intentionally skipped that part (may want that high net worth individuals money to come market and also want to shift small retail traders money to mutual fund)!
Otherwise why they are overlooking the most deciding factor for F&O trading is the knowledge not the networth. With the required knowledge, one can earn small with a small capital too. And without the required knowledge, one big networth individual will lose big capital too very quickly. Why is SEBI not understanding the simple fact?

 

[Smart_trade]

Large brokerages are silent on the issue.....even MFs are silent. No discussions from their side. Atleast I have not seen any.

We have to wait till SEBI comes out with the rules and then see how we adapt to the new regime. I also feel that SEBI will put restrictions but not so much to kill the market.........people will have to trade with less leverage.....Let us hope for the best...

Smart_trade

 

[trader2017]

do you guys know whether gains from any trade will be further allowed to be added into the next trade? for ex- if the gains at one point reaches above my itr/networth limit will i be allowed to trade beyond my networth or is it that whatever trades i take must be withing my networth/itr limit only and there will be no scope for compounding of these returns as will be higher than my networth/itr?

 

[vikas2131]

It is a probability, as some traders will definitely use the multiple accounts to bypass the rule.
Yes, such thought was published in one of the article in economic times (it was some editors personal view).

liquidity concerns will stop them from introducing rigid regulations . Papers that have been released talks about using net worth as criteria to limit exposure only . i feel they will form some kind of database to make sure nobody could do bypassing of net-worth rule.

 

[Smart_trade]

liquidity concerns will stop them from introducing rigid regulations . Papers that have been released talks about using net worth as criteria to limit exposure only . i feel they will form some kind of database to make sure nobody could do bypassing of net-worth rule.

Each account will be mapped to a PAN No and the networth. SEBI may even close multiple trading accounts with same PAN or give a certain exposure to all accounts shared between them and leave the choice of which account to use to the trader,to avoid the misuse.
So byepassing the rules will be difficult.

Smart_trade

 

[Swift.trader]

https://www.livemint.com/Money/b73S...-decision-to-make-them-responsible-for-r.html

 

[Vitthala]

I think so, as there is already a report that some SEBI official said exposure is only 40-50% of networth.
But, my fear is not my trading capital but the possible liquidity crisis,
if SEBI set even min capital required for F&O trading to say, at least 5 lakh capital (which is very much likely). Then most of the F&O participant is out of the market. Option segment will be dead first then the futures will follow soon, then the rest of the market(equity cash).

yes,5L is a very big amount for small retailers,many traders will be out for sure.
the traders who were profitable from atleast last 2yrs will stay for some more time,but yes,liquidity wont be there