NSE CEO sees growth in derivatives market, emphasises investor safeguards

National Stock Exchange of India (NSE) CEO Ashishkumar Chauhan, speaking at the FIA conference in Mumbai on Thursday, highlighted the growing importance of derivatives markets in India amid rapid technological, geopolitical and financial market shifts.

He said due to technological changes, which are bringing many other shifts, including geopolitical and financial market changes -- very rapidly -- over the next 20-30-50 years, the need for markets that allow management and transfer of risk, such as derivatives markets, will increase and continue to grow over time.

However, Chauhan emphasised caution for retail participation. "At the same time, a developing country like India cannot allow over speculation by lower strata of the economy," he stated.

He added, "Hence, more and more regulations will come from government regulators and exchanges, to curb over speculation till the time perception of the lower strata of the society doing over speculation continues. No developing country can allow its lower strata citizens to waste their money, energy and resources over speculation."

Chauhan also suggested implementing a minimum qualifying criteria for participation in derivatives trading, similar to frameworks in Singapore, the USA and other countries.

"Most countries have already adopted this regime and it is high time India adopts to that so that the protection required for lower strata is adequately provided and government objectives are fulfilled," he said.