India Defers Decision on Steps to Curb Frenzy in Options Trading

(Bloomberg) — India’s securities market regulator surprised investors by refraining from announcing measures to limit a surge in derivatives trading, even as it tinkered with rules for the nation’s booming mutual fund industry.
The Securities and Exchange Board of India was widely expected to discuss and approve measures proposed in July — including limiting the number of options with weekly expirations and raising the minimum contract size — at a board meeting Monday, after growing retail participation took the speculative bets to the highest in the world. However a 23-page statement had no mention of the deliberations. 
“Market was expecting some kind of clampdown after recent warnings,” said Abhay Agarwal, founder and fund manager at Piper Serica Advisors Pvt. “It is now bound to create more anxieties as to what’s the regulator’s intent: will it be just rhetorical warnings or will there be some action too.”
It’s unclear if the matter was discussed at the board meeting, and if so, whether any decisions will be announced in the coming days. A spokesman for Sebi didn’t reply to queries outside of business hours in Mumbai.
Why Giant India Options Market Is Worrying Regulators: QuickTake
Steps Sebi approved at the meeting:
SEBI Chairperson Madhabi Puri Buch had described the surge in derivatives trading as a “macro issue” that diverts capital from productive use in the economy. Her warnings — and tax hikes coming into effect next month — have helped bring down the volume of contracts traded from a record $6 trillion in February. 
“A lot of high-networth-individual traders who were circumspect on taking positions in derivatives because of expectations of these new curbs, could come back to the market,” said Tejas Shah, head of derivatives trading at Equirus Securities Pvt. “No negative news is also a positive.”
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