NSE Md Ashish Chauhan Proposes Stricter Entry Rules For F&O Trading

AshishKumar Chauhan, the Managing Director and Chief Executive Officer of the National Stock Exchange, addressed concerns regarding the risk associated with equity futures and options during a securities market research conference in Mumbai. He suggested that if regulators perceive these financial products as highly risky, they should consider raising the minimum contract lot size and investor net worth requirement. This adjustment would effectively elevate the entry barrier for investors, limiting participation to those capable of managing the associated risks. Chauhan emphasized the importance of aligning leverage levels in equity derivatives trading with investors' risk tolerance. He suggested that such leverage should primarily be utilized by investors who possess the financial capacity to withstand potential downsides. The conference, jointly organized by the market regulator and the National Institute of Securities Markets, provided a platform for discussing critical issues pertaining to market regulation and investor protection.