NSE chief Ashishkumar Chauhan proposes minimum eligibility criteria for F&O trading; sees volume dip after STT hike
Ashishkumar Chauhan said a developing economy like India cannot allow “over-speculation” by the lower strata of society. He suggested that eligibility filters—similar to those in markets such as Singapore and the US—could help ensure that only informed and financially capable participants trade in complex derivative products.
- Feb 27, 2026,
- Updated Feb 27, 2026 9:48 AM IST
National Stock Exchange (NSE) Managing Director and CEO Ashishkumar Chauhan has proposed the introduction of minimum qualifying criteria for participation in the futures and options (F&O) segment, arguing that India must guard against excessive speculation, particularly among financially vulnerable investors.
Speaking at a conference on Thursday, Chauhan said a developing economy like India cannot allow “over-speculation” by the lower strata of society. He suggested that eligibility filters—similar to those in markets such as Singapore and the US—could help ensure that only informed and financially capable participants trade in complex derivative products.
“Most countries have already adopted such a regime,” Chauhan noted, adding that it is time India considers similar criteria to provide adequate protection to retail investors and align with broader public policy goals. He indicated that additional regulations from market regulators and exchanges may be introduced to prevent individuals from losing money and resources through high-risk speculative activity.
STT hike
Chauhan also flagged a likely moderation in F&O trading volumes once the revised Securities Transaction Tax (STT) rates come into effect on April 1, marking the start of FY27.
The Union Budget 2026-27 proposed raising STT on futures trades to 0.05% from 0.02%. In the options segment, the tax on premium has been increased to 0.15% from 0.1%, while the levy on exercise of options has also been raised to 0.15% from 0.125%. The government has said the move is intended to curb excessive speculative trading in equity derivatives.
“We expect some degrowth in F&O volumes after the tax changes kick in,” Chauhan said, suggesting that higher transaction costs could dampen short-term and high-frequency speculative trades.
The finance ministry had earlier expressed concern over the rapid rise in retail participation in index and stock options, with data showing significant losses among small traders. Over the past year, the Securities and Exchange Board of India (SEBI) has rolled out multiple risk-management measures aimed at reducing retail overexposure to derivatives.
Derivatives growth
India’s derivatives market has witnessed explosive growth in recent years, with the NSE emerging as one of the largest exchanges globally in terms of contracts traded. However, this surge has also intensified regulatory scrutiny.
Chauhan’s remarks signal a potential shift toward tighter entry norms and higher transaction costs in the F&O segment, reflecting a broader policy push to balance market growth with investor protection and systemic stability.
National Stock Exchange (NSE) Managing Director and CEO Ashishkumar Chauhan has proposed the introduction of minimum qualifying criteria for participation in the futures and options (F&O) segment, arguing that India must guard against excessive speculation, particularly among financially vulnerable investors.
Speaking at a conference on Thursday, Chauhan said a developing economy like India cannot allow “over-speculation” by the lower strata of society. He suggested that eligibility filters—similar to those in markets such as Singapore and the US—could help ensure that only informed and financially capable participants trade in complex derivative products.
“Most countries have already adopted such a regime,” Chauhan noted, adding that it is time India considers similar criteria to provide adequate protection to retail investors and align with broader public policy goals. He indicated that additional regulations from market regulators and exchanges may be introduced to prevent individuals from losing money and resources through high-risk speculative activity.
STT hike
Chauhan also flagged a likely moderation in F&O trading volumes once the revised Securities Transaction Tax (STT) rates come into effect on April 1, marking the start of FY27.
The Union Budget 2026-27 proposed raising STT on futures trades to 0.05% from 0.02%. In the options segment, the tax on premium has been increased to 0.15% from 0.1%, while the levy on exercise of options has also been raised to 0.15% from 0.125%. The government has said the move is intended to curb excessive speculative trading in equity derivatives.
“We expect some degrowth in F&O volumes after the tax changes kick in,” Chauhan said, suggesting that higher transaction costs could dampen short-term and high-frequency speculative trades.
The finance ministry had earlier expressed concern over the rapid rise in retail participation in index and stock options, with data showing significant losses among small traders. Over the past year, the Securities and Exchange Board of India (SEBI) has rolled out multiple risk-management measures aimed at reducing retail overexposure to derivatives.
Derivatives growth
India’s derivatives market has witnessed explosive growth in recent years, with the NSE emerging as one of the largest exchanges globally in terms of contracts traded. However, this surge has also intensified regulatory scrutiny.
Chauhan’s remarks signal a potential shift toward tighter entry norms and higher transaction costs in the F&O segment, reflecting a broader policy push to balance market growth with investor protection and systemic stability.