India should bring minimum requirements for trading in derivatives, similar to those in the US, Singapore, and many other countries, Ashish Chauhan, managing director and chief executive officer of the National Stock Exchange, said. This may ensure that “lower strata people don’t participate in the Indian derivatives market and lose money,” he proposed while speaking at the Futures Industry Association (FIA) Forum’s event on Thursday.
Chauhan also said that government regulators and exchanges will bring more and more regulations to curb over speculation “till the time perception of lower strata of the society doing over speculation continue.” No developing country can allow its lower strata citizens to waste their money, energy, and resources over speculation, he added.
Global Standard
The US and Singapore have stricter, high-capital regulations to trade in derivatives compared to India. These include a mandatory minimum balance requirement of $25,000 in a margin account, while India does not have any such criteria. These foreign countries also require advanced trading permissions and specific margin account maintenance.
The NSE CEO’s comments come at a time when the securities markets regulator and the government has been tightening norms to reduce retail participation in the futures and options (F&O) segment. The latest blow to derivatives traders was the proposal to hike securities transactions tax announced during the Union Budget On February 1. STT on equity futures will be raised to 0.05% from 0.02% and that on options premiums will be increased to 0.15% from 0.1%.
Mounting Losses
The Securities and Exchange Board of India (Sebi) has also been tightening norms in the derivatives space, particularly as 91% of individual retail traders in the segment incurred a net loss of over ₹1 lakh crore in FY25. This is a sharp jump of 41% from ₹74,812 crore in the previous financial year. On an average, such a trader lost ₹1.1 lakh in FY25, up 27% on year.
It is unlikely that the markets regulator will bring any suitability criteria at an entry level, some derivatives analysts said. In March 2025, the then Sebi whole-time member Ananth Narayan had said that the regulator is not mulling any exams or tests to evaluate investor suitability to trade in F&O.