In a move that could fundamentally change the landscape of the Indian derivatives market, Ashishkumar Chauhan, MD & CEO of the National Stock Exchange (NSE), has proposed the introduction of “minimum qualifying criteria” for participation in Futures and Options (F&O) trading.
The proposal comes at a time when retail speculation has reached fever pitch, prompting concerns from the government, SEBI, and now the country’s largest exchange.
The “Why” Behind the Curbs
Chauhan’s primary concern is the protection of the “lower strata of society.” Highlighting a stark reality—where over 90% of retail traders lose money in derivatives—he argued that a developing economy like India cannot afford to let its citizens waste energy and resources on high-stakes speculation.
“No developing country can allow its lower-strata citizens to waste their money… on speculation,” Chauhan stated, suggesting that India should align with global markets like the US and Singapore, which have stricter eligibility filters for complex financial products.
What These “Eligibility Criteria” Could Look Like
While specific details are yet to be finalized by the regulator (SEBI), the proposed barriers could include:
- Net Worth Requirements: Minimum liquid assets or annual income thresholds (similar to the ₹50 lakh income/₹5 crore net worth required for Accredited Investors).
- Knowledge Filters: Potential mandatory certifications or tests to ensure traders understand the leverage and risks involved.
- Portfolio Size: Higher minimum contract values (SEBI has already begun raising these from ₹5 lakh to ₹15 lakh).
STT Hike: The First Blow
The NSE chief also flagged that the upcoming Securities Transaction Tax (STT) hike, effective April 1 (FY27), will likely lead to a “degrowth” in volumes. The 2026-27 Union Budget increased tax on futures to 0.05% and options to 0.15%. These higher costs are intentionally designed to act as a speed bump for high-frequency speculative trades.
The Bottom Line
The message from the top is clear: F&O is for hedging, not gambling. If retail speculation doesn’t cool down voluntarily, more aggressive regulatory “curbs” are inevitable. For the average investor, the era of low-barrier entry into the world of leverage is likely coming to an end.