The SEBI board meeting on September 30 will focus on key issues in the derivatives market, including its recent report showing that nearly 90% of retail investors in futures and options have lost money due to over-leveraging or misjudging market risks, sources told CNBC Awaaz.

A significant proposed change includes an increase in the minimum contract value, potentially rising to ₹15-20 lakh at launch and later to ₹20-30 lakh, aimed at deterring retail investors, according to the sources.

Other key agenda items will cover the India Derivative Market Framework and the regulation of F&O expiries, especially concerning losses experienced by retail investors in the options segment. Additionally, discussions may include the implementation of one index-based weekly contract per stock exchange and plans to rationalise strike prices.

The proposed changes will follow a recent analysis by the Securities and Exchange Board of India (SEBI), which revealed the financial struggles of retail investors in the equity futures and options (F&O) segment.

Over the three years from FY22 to FY24, 93% of more than 10 million individual traders incurred losses, with an average loss of ₹2 lakh per trader, including transaction costs.

On August 30, 2024, the Securities and Exchange Board of India (SEBI) overhauled the eligibility criteria for the entry and exit of stocks in the futures and options (F&O) or derivatives segment, marking a pivotal shift to boost market quality and activity. These new norms by the capital markets regulator are designed to ensure that only high-calibre stocks with robust market activity are eligible for trading in this segment.

Under SEBI’s new norms, notably, the Median Quarter Sigma Order Size (MQSOS) requirement has tripled from ₹25 lakh to ₹75 lakh, reflecting the significant growth in market turnover since the last review in 2018.

Market analysts and several domestic investment advisory firms have largely welcomed the move, noting that it aligns closely with earlier indications from SEBI’s chief and represents a timely and pragmatic adjustment.

By raising the cost of each trade, the government also hopes to encourage more cautious participation in the derivatives market.

Also Read : BSE revises transaction charges for Sensex, Bankex options from October 1