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

[TraderGYO]

The Income Tax rules are framed by the Government Of India whereas the rules with regards to securities are governed by SEBI. That's why! Because it is mentioned in the IT act that derivatives income is not speculation does not mean SEBI will say, oh yeah we forgot about that .

Tejas, all of your points in this thread is valid. But would you agree that lack of coordination between the Government and the Governing body is behind lots of problem today?

 

[headstrong007]

Could you provide a link to the article?

5 reasons why any proposal to increase F&O lot size is flawed

The initiative by the finance ministry and Sebi in increasing lot size is flawed on many grounds and exposes their failure in educating the masses whom they seek to protect

Shishir Asthana

Here is the link:-

https://www.moneycontrol.com/news/b...o-increase-fo-lot-size-is-flawed-2487023.html

 

[soft_trader]

@headstrong007 can you please share the letter with us so that we can also send the same to sebi and pmo.

 

[Tejas Khoday]

Most traders usually have at least 2-3 trading account with different brokers.
Is that possible for SEBI to track live cumulative positions using different brokers every day? SEBI is just making all things complicated.

This is a valid point. So, a trader will submit the same ITR to 2-3 brokers and get 2-3 times the exposure he is legally permitted to? In the current environment, there is no way to track such activities in real-time.

 

[Tejas Khoday]

I am fearing increase of lot size much more than income based limit.

Imagine if they calculate eligibility on contract value. Then basically, more than 90% of the traders can't even trade one lot. Since almost everyone tries their level best to file in the 20% tax bracket and most contract sizes are 10 lacs and beyond.

 

[timepass]

There are SEBI charges in the contract note. Why would SEBI want to dilute its own income ?

 

[TraderGYO]

Imagine if they calculate eligibility on contract value. Then basically, more than 90% of the traders can't even trade one lot. Since almost everyone tries their level best to file in the 20% tax bracket and most contract sizes are 10 lacs and beyond.

Then the outrage would be immense. What will happen to those who do not have a salaried job?
Are the after small retail traders or small discount brokers or both?

 

[soft_trader]

There are SEBI charges in the contract note. Why would SEBI want to dilute its own income ?

That income is peanuts compared to even stamp duty. And any income of SEBI is income of GoI. So even if govt is successful in shifting 5% of f&o volumes to cash they will earn more STT than they would lose on sebi charge.

 

[Tejas Khoday]

It's easy to implement. SEBI already increased min contract size from 2lakh to 5lakh. Currently, most contracts around 10 lakhs already.

The most irritating fact is, SEBI don't bother about liquidity in F&O. SEBI clearly want to shift the volumes from F&O to CASH by any means. So the large-scale protests are needed.

Previously protest against high STT on exercised options was successful. So I am still hopeful as this type of regulation is going to hurt small to big all types of F&O traders and all discount brokers too.

These last 4 years have just been so anxiety prone for the people of India. I do not remember when last time Indians felt worried about their savings so much. Today we sit in communities and the prime talk is about how to manage money so that it doesn't vanishes.

Despite all the worry, there have been no signs of a run on the bank. People's confidence in the PSU banks & the Central Government still remains strong despite the hard-hitting negative news since 2012 which has only accelerated in recent times. If NPA scandals of this stature would've occurred in any private sector bank, then you know for sure that people will run to the bank and run out with their money!

 

[Tejas Khoday]

Then the outrage would be immense. What will happen to those who do not have a salaried job?
Are the after small retail traders or small discount brokers or both?

Since when did Income Tax Returns become a qualification to trade in derivatives? So, I guess the assumption is that the more money a person has earned regardless of his profession, the higher knowledge he has on derivatives. That's what it implies. Even if there is outrage, life goes on.