The Securities and Exchange Board of India (SEBI) has proposed new measures to reduce speculation in futures and options (F&O) trading. Brokerage firm Jefferies has analyzed the potential impact of these changes.
Key Points:
- SEBI plans to remove 12 out of 18 weekly option contracts.
- The new rules could affect about 35% of F&O premium.
- The impact might be limited to 20-25% if trading moves to remaining products.
- Retail traders may face challenges due to increased lot sizes and higher margins near expiry.
Different Market Players Will Be Affected Differently:
- Exchanges and brokers focused on retail clients are likely to be most affected.
- BSE might see a 7-9% drop in earnings per share (EPS) from 2025 to 2027 due to the removal of the Bankex weekly contract.
- Clearing members like Nuvama, who work with institutional players, may see less direct impact but could face some secondary effects.
- Jefferies suggests that increased trading in remaining products could offset some negative impacts on earnings.
The analysis includes a table from Jefferies showing how different market segments might be affected:
| Capital Market Segment | Impact of F&O Changes | Key Listed Players |
|---|---|---|
| Discount Brokers | Very high | Angel One |
| Exchanges | Very high | BSE, MCX |
| Traditional Brokers | High | MOFSL, IIFL Sec, ICICI Sec |
| Clearing Members | High | Nuvama |
| Depositories | Low | CDSL, NSDL |
| Wealth Managers | None | 360 One, Nuvama, Prudent Corp |
| AMCs | None | HDFC AMC, Nippon, UTI AMC, ABSL AMC |
| RTAs | None | Kfin Tech, CAMS |
Jefferies notes that if the industry-wide impact of SEBI’s measures is moderate, it could even lead to improved earnings forecasts for some players.
