SEBI mulls longer-tenure equity derivatives; consultation paper coming, says Tuhin Pandey

Market regulator Securities and Exchange Board of India (SEBI) is considering increasing the tenure of equity derivatives, Chairman Tuhin Kanta Pandey said on Thursday. A consultation paper on the proposal will be released soon.

“Improving the tenure really means whether we can have longer-term derivatives, but all this is to be done in consultations,” Pandey said while responding to a question on the need for longer-duration contracts beyond the current weekly cycle. He noted that the regulator would prefer a calibrated approach. “Yes, I mean, that is qualitatively we have to see, but we have to calibrate it,” he said.

On the timing of the consultation paper, Pandey said, “I can’t tell you that, but that’s the kind of thinking process we have.” 

Separately, Pandey also touched upon the idea of allowing pre-IPO trading but clarified that it remains a preliminary thought. “No, because these are not something which are… this is only in principle what I’m stating,” he said when asked whether there had been any discussions so far.

On whether SEBI had engaged with depositories regarding a possible pilot project on pre-IPO trading, Pandey said that no such talks had taken place. “This is just an idea I’m just throwing now, you know, as a question mark. If you just go through my speech, we’ll get it uploaded,” he added.