SEBI's Regulatory Changes Impact Markets

SEBI is implementing significant regulatory changes aimed at improving market transparency and protecting investors. Recently, they mandated market infrastructure institutions to be transparent in the transaction fees they levy, which affects how brokers operate and could potentially increase brokerage rates. Additionally, proposed measures to reduce speculative trading in index futures and options, such as increasing contract sizes, may discourage trading in these instruments, leading to reduced volumes. Although SEBI's intentions to enhance market stability are commendable, the likely unintended consequence could be a decrease in trading activities among major market participants, which would negatively impact liquidity in the futures and options segments.