Latest news with #SEBI
Reuters
21 minutes ago
- Business
- Reuters
India stock exchange derivative activity slips by a third since Jane Street trading ban
July 17 (Reuters) - Trading in India's weekly equity index options has slumped by a third since the country's market regulator banned U.S. high-frequency trading giant Jane Street in the local market earlier this month, exchange data showed on Thursday. National Stock Exchange of India - the world's largest derivatives exchange by number of contracts traded - saw a nearly 36% drop over two weeks in index options premium turnover, a key measure of real capital deployed and risk appetite. The options premium turnover stood at 396.26 billion rupees ($4.6 billion) on Thursday, which is the day of weekly options expiry on NSE. The Securities and Exchange Board of India barred Jane Street on July 4, saying an investigation found it manipulated stock indexes through positions taken in derivatives. NSE's rival exchange BSE ( opens new tab also saw its options premium turnover drop 36.4% below the July 3 levels. BSE index options expire on Tuesdays. Emails to NSE and BSE were not immediately answered. Out of the 10 sessions since the ban, turnover has declined in six on a week-on-week basis across both the exchanges. "The notable decline in options premium turnover can be attributed to the abrupt withdrawal or reduction of activity by Jane Street, which serves as a primary liquidity provider within the options market," said Osho Krishan, senior analyst of technical and derivatives research at brokerage Angel One. Unless new market-makers step in or volatility rises materially, turnover is unlikely to bounce back soon, Krishan said. Traders also point to a broader lull in volatility dragging volumes. "This isn't just a Jane Street story," said Mayank Bansal, a portfolio manager in India's options market. "It's mostly about volatility — once that comes back, so will the volumes." The Nifty volatility index (.NIFVIX), opens new tab has fallen in nine of the 13 sessions in July so far, and was hovering near a more than one-year low. ($1 = 86.0410 Indian rupees)
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Business Standard
4 hours ago
- Business
- Business Standard
SEBI aims to deepen equity market, flags concerns over derivatives frenzy
SEBI on Thursday expressed concern over the growing dominance of ultra-short-term derivatives trading, cautioning that such trends could undermine the health of India's capital markets, while contemplating steps to extend the tenure and maturity of these products. Very short-term derivatives continue to dominate equity derivative volumes, especially expiry-day index options. This is an imbalance that is obviously unhealthy and may have potential for adverse consequences," said SEBI Whole-Time Member Ananth Narayan. He was addressing the 11th Capital Markets Conclave organised by the CII. "I would strongly endorse the view that, towards this end, we must look for ways to further deepen our cash equities markets, even as we look to improve the quality of our derivatives market by extending the tenure and maturity of the products and solutions on offer. We need constructive engagement from all stakeholders to achieve this," he said. Citing the market regulator's own research, Narayan pointed out that 91 per cent of individual traders in futures and options (F&O) incurred net losses in FY25 - collectively losing over Rs 1 lakh crore - funds that could otherwise contribute to responsible investing and capital formation. He highlighted that the Indian derivatives market is unique, with expiry-day index option turnover often exceeding the cash market by as much as 350 times. Unlike longer-term derivatives, these short-term products contribute little to capital formation and may actually add to market volatility, Narayan said. While acknowledging that exchanges, brokers, and other intermediaries have significant revenue dependence on such trading volumes, the SEBI official questioned the sustainability of this trend. Is all this at all sustainable? he asked. SEBI has already introduced regulatory measures in October 2024 and May 2025 aimed at curbing excesses in this space, which Narayan said are showing some early signs of moderation. However, he emphasised the need for continuous engagement with stakeholders to ensure that both capital formation and market health are protected. We must look for ways to deepen our cash equities markets while improving the quality of derivatives through longer-tenure products, Narayan said, urging industry collaboration. Responding to a question, he underscored the advantages of listing, particularly in the current environment where valuations are very, very attractive. Going public can unlock substantial value and enable companies to raise capital in a very meaningful manner, acting as a force multiplier for achieving scale and growth. SEBI is working to boost participation and innovation across asset classes by enhancing transparency in corporate bonds, InvITs, REITs, municipal bonds, and expanding commodity derivatives. It has urged all stakeholders to support these efforts. Narayan underscored that preserving trust is the key ingredient for healthy capital markets. Our funds ecosystem has grown significantly with substantial growth in both issuances and investments. Something good is underway around capital formation, he noted. However, he warned that unchecked speculation, governance failures, technology lapses, market manipulation, or flawed market design (Type I errors) could destroy investor trust and kill the goose that is laying golden eggs. At the same time, he cautioned against over-regulation (Type II errors) that might stifle legitimate business or capital formation. We in SEBI look at both risks very closely and undertake extensive consultations to minimise both together, he assured. Narayan urged exchanges, clearing corporations, and depositories to maintain strong operational resilience and risk management while balancing commercial interests with public trust. He also called upon intermediaries and industry players to act as trusted advisors. When you see something wrong, please say something. And when you seek regulatory relief, please engage with us openly on how risks of potential Type I errors will be mitigated, he said. Narayan also emphasised that compliance with disclosure and governance standards associated with being a listed entity enhances long-term sustainability, likening transparency to sunlight being the best disinfectant. He expressed a personal hope to see more micro, small, and medium enterprises (MSMEs) list and grow into large national champions, though he reiterated that the choice ultimately rests with promoters. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Time of India
4 hours ago
- Business
- Time of India
Sebi proposes to bring uniformity in valuation process of gold and silver ETFs
The Securities and Exchange Board of India (SEBI) has proposed a review of the valuation of physical gold and silver in cases of gold and silver Exchange Traded Funds (ETFs) as this change is expected to bring uniformity in the valuation process of gold and silver throughout the mutual fund industry, for investments made by the gold and silver ETFs . SEBI has invited public feedback on this proposal by August 6, 2025, indicating a likely implementation soon after. Currently mutual fund houses managing gold and silver based ETFs use London Bullion Market Association (LBMA) price in US dollars as the benchmark, according to a consultation paper by Sebi. Explore courses from Top Institutes in Select a Course Category Data Science CXO others MBA PGDM Public Policy Cybersecurity Digital Marketing Data Science Operations Management MCA Degree Technology Project Management Design Thinking Others Healthcare Product Management Artificial Intelligence Leadership healthcare Management Finance Data Analytics Skills you'll gain: Data Analysis & Interpretation Programming Proficiency Problem-Solving Skills Machine Learning & Artificial Intelligence Duration: 24 Months Vellore Institute of Technology VIT MSc in Data Science Starts on Aug 14, 2024 Get Details Skills you'll gain: Strategic Data-Analysis, including Data Mining & Preparation Predictive Modeling & Advanced Clustering Techniques Machine Learning Concepts & Regression Analysis Cutting-edge applications of AI, like NLP & Generative AI Duration: 8 Months IIM Kozhikode Professional Certificate in Data Science and Artificial Intelligence Starts on Jun 26, 2024 Get Details Also Read | Confused between gold and silver? Why not leave it for fund manager to decide Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Top 15 Most Beautiful Women in the World Further, customs duty and other applicable taxes and levies are also factored in for arriving at the final valuation. The price is further adjusted to the Indian bullion prices, which are often either at a premium or discount to the LBMA prices based on the domestic demand and supply. The fund houses managing gold and silver ETFs currently face the challenge of duplication of effort for valuing physical gold/ silver held by mutual fund schemes. Presently, different AMCs use different sources of domestic benchmark to apply necessary premium/ discount, which leads to non- uniformity of the valuation practice for gold and silver across the MF industry. Further, in the absence of any regulatory direction, AMCs use their discretion to apply premium/ discount resulting in differences in valuation of gold/ silver. Live Events While the physical gold/silver held by gold and silver ETFs are valued as per the LBMA process, the Exchange Traded Commodity Derivatives (ETCDs) on gold/silver held by MF schemes are valued as per the closing price of Futures in the domestic commodity exchange of the respective ETCDs. Therefore, if any gold/silver ETF invests in both physical gold/ silver and ETCDs, two different sources are used for valuation of the same asset class in that scheme. Sebi has now proposed consideration of spot price published by the domestic commodity exchanges for valuation of gold and silver and polling process for calculation of spot prices in case of both gold and silver. Also Read | Stocks, FD or Mutual Funds? Radhika Gupta shares 3 basics to smart investing 'SEBI's proposal to shift gold and silver ETF valuation from LBMA-based pricing to domestic commodity exchange spot rates is a significant reform. It brings uniformity across AMCs, eliminates subjective premium/discount adjustments, and aligns NAVs more accurately with local demand-supply conditions. This simplifies operations, enhances transparency, and strengthens investor confidence,' said Akshat Garg, AVP, Choice Wealth. 'As India witnesses rising gold ETF inflows amid global uncertainty, this move could boost both retail and institutional participation. While care must be taken to ensure polling mechanisms remain robust and tamper-proof, this transition reflects SEBI's broader goal of deepening trust in India's capital and commodity markets through localized, data-driven frameworks,' Garg further added.
Entrepreneur
5 hours ago
- Business
- Entrepreneur
JioBlackRock Gets Sebi Nod for Four Mutual Fund Schemes
The approved offerings include the JioBlackRock Nifty 8–13 Yr G-Sec Index Fund, Nifty Smallcap 250 Index Fund, Nifty Next 50 Index Fund, and Nifty Midcap 150 Index Fund. Among these, three are equity-based index funds, while one is focused on government debt securities. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. JioBlackRock Asset Management, the joint venture between Jio Financial Services and global investment firm BlackRock, has received regulatory approval from the Securities and Exchange Board of India to launch four mutual fund schemes. The approved offerings include the JioBlackRock Nifty 8–13 Yr G-Sec Index Fund, Nifty Smallcap 250 Index Fund, Nifty Next 50 Index Fund, and Nifty Midcap 150 Index Fund. Among these, three are equity-based index funds, while one is focused on government debt securities. The company aims to tap into India's growing investor base with a digital-first approach that emphasises simplicity in fund offerings. This strategy aligns with models used by fintech firms like Zerodha, Groww, and Navi. With strong financial backing and access to a large user base, JioBlackRock is expected to bring increased competition to the market. Nithin Kamath, founder of Zerodha, responded positively to the entry of JioBlackRock, suggesting it could help broaden India's investor base. He also reiterated Zerodha's commitment to long-term profitability and customer-focused services, noting that financial strength alone does not create enduring advantages in stockbroking. Earlier this month, JioBlackRock completed its first new fund offer, raising INR 17,800 crore across three schemes. The offer attracted over 90 institutional investors and more than 67,000 retail investors in just three days. In addition to mutual funds, Jio Financial is expanding into wealth management and stockbroking. It recently established Jio BlackRock Broking Pvt Ltd, which is awaiting regulatory clearance to begin operations.
Reuters
6 hours ago
- Business
- Reuters
India markets regulator looks to extend tenure of derivatives contracts, official says
July 17 (Reuters) - India is looking to improve the quality of the derivatives market by extending the tenure and maturity of such contracts, an official at the markets regulator said in a speech on Thursday. "We must look for further ways to further deepen our cash equities markets, even as we look to improve the quality of our derivatives market by extending the tenure and maturity of the products and solutions on offer," said Ananth Narayan, a whole-time member at the Securities and Exchange Board of India (SEBI). Narayan did not provide details on the possible extension of the tenure of these contracts. The surge in derivatives trading, which has also been driven by retail investors, has prompted the SEBI to limit the number of contract expiries and increase lot sizes to make such trades more expensive. Earlier this month, SEBI barred U.S. securities trading company Jane Street from the local market until further orders, and seized $567 million of its funds, saying an investigation found it manipulated stock indexes through positions taken in derivatives. "Short-term contracts dominate our equity derivatives volumes," Narayan said. He said that these contracts detract from capital formation. SEBI's research shows that 91% of individual traders incurred net losses trading in futures and options in fiscal 2025. Highlighting the imbalance between cash markets and derivatives, Narayan said that on expiry days, comparable turnover in index options can exceed the cash market by over 350 times.
