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

[headstrong007]

https://www.sebi.gov.in/reports/rep...market-conduct-for-public-comments_39884.html

So this is the report of committee formed by Sebi based on which Sebi will impose restrictions. But nowhere in this report has mention of any recommendation regarding net worth..

Am I missing something..

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Please go through the previous posts, last few reports from 2017, it is a continuous process. You can find the links of other SEBI documents and reports which quoted them, already posted here.

In some document published by SEBI, the following was quoted.

To reflect global initiatives on product suitability, a framework has been approved**. Individual investors may freely take exposure in the market(cash and derivatives)upto a computed exposure based on their disclosed income as per their Income Tax Return(ITR) over a period of time.** For exposure beyond the computed exposure, the intermediary would be required to undertake rigorous due diligence and take appropriate documentation from the investor.


Networth is the alternate legal way to skip such ITR, someone may have enough capital for trading or investing but no income(or less income) presently or someone may get sudden net-worth from inheritance.

 

[TradeJoker]

https://www.thehindubusinessline.co...al-your-financial-sources/article24719203.ece

 

[vikas2131]

According to the report,

“A sizeable number of small investors who invest through margin funding will have to wind up their positions in the stock markets as they will not be able to produce the required net worth,” said the CEO of leading brokerage.

A Mumbai-based broker said investors will have to get a net worth certificate and adjust their portfolio accordingly. “Money could also move from direct equities to mutual funds and retail brokers might lose their business,” he added.

********
But, Money could also move from direct equities to mutual funds, if this is the goal for present Government(not absolutely sure but chances are high), then they will try to apply it as soon as possible if uncertain about the outcome about 2019 election.

Personally i don't think restriction wont be as bad as korea but days of over-leveraging is over now ..One would good need good of amount of capital to trade now. 5 lakhs would be probably bare minimum.

 

[headstrong007]

Personally i don't think restriction wont be as bad as korea but days of over-leveraging is over now ..One would good need good of amount of capital to trade now. 5 lakhs would be probably bare minimum.

According to reports, SEBI is thinking min capital for F&O training account as traders will try to bypass the rule using different brokers and they can't livelily monitor different account simultaneously.

IMO, even, if it is even 2 lakh F&O Indian Market will be dead. Most of the small retail traders are trading with less than 2 lakh capital.
There will be a huge liquidity crisis without the small retail traders. The market will definitely lose the momentum without enough F&O volumes.

 

[vikas2131]

According to reports, SEBI is thinking min capital for F&O training account as traders will try to bypass the rule using different brokers and they can't livelily monitor different account simultaneously.

IMO, even, if it is even 2 lakh F&O Indian Market will be dead. Most of the small retail traders are trading with less than 2 lakh capital.
There will be a huge liquidity crisis without the small retail traders. The market will definitely lose the momentum without enough F&O volumes.

where did you read that ? Btw people below 2 lakhs account are already considered retail investors.. so i wont be surprised that they limit anyone below that amount to trade F&O.

 

[headstrong007]

where did you read that ? Btw people below 2 lakhs account are already considered retail investors.. so i wont be surprised that they limit anyone below that amount to trade F&O.

All pieces of information are from various current reports from popular financial sites.

Zerodha said it somewhere out of their few lakhs active accounts most of the traders/investors are trading/investing with less than 1 lakh capital and this is true for most of the brokers.

 

[vikas2131]

All pieces of information are from various current reports from popular financial sites.

do post from where u read all that

 

[headstrong007]

do post from where u read all that

Most of the times posting the link, it is difficult to backtrack such link after a few days the only important piece of info remains in memory. Also, a possible liquidity crisis is one of the most important events which was discussed on CNBC.
economictimes.com and moneycontrol.com are my main sources for various info. Rest is knowledge from the various trading book.
I have already posted, some reports(2013 year) on the real effect of similar liquidity crisis after regulation in South Kora when they kicked out the most of retail traders from the market. Few posts above there are the links.

I'll try to post the similar link whenever possible.

 

[vikas2131]

Most of the times posting the link, it is difficult to backtrack such link after few days only important piece of ino remians in memory. Also, a possible liquidity crisis is one of the most important events which was discussed on CNBC.
economictimes.com and moneycontrol.com are my main sources for various info. Rest is knowledge from the vairous trading book.
I have already posted, some reports on the real effect of similar liquidity crisis after regulation in South Kora when they kicked out the most of retail traders from the market. Few posts above there are the links.

I'll try to post the similar link whenever possible.

This is also exactly the reason why i think is regulations wont be very hard bec unlike korea here any issue will lead to liquidity moving out to sgx and such other index . There is already case going on regarding this in Bombay HC

 

[Swift.trader]

https://www.sebi.gov.in/media/press...e-committee-on-fair-market-conduct_39885.html