'How can we shut down just like that': SEBI chief's big remark on weekly F&O expiries

Securities and Exchange Board of India (SEBI) chairperson Tuhin Kanta Pandey on Friday indicated that the regulator is treading cautiously on the issue of curbing weekly derivatives expiries, calling it a “sensitive subject” that requires a calibrated and consultative approach rather than abrupt action.

Speaking at the Business Standard BFSI Summit 2025, Pandey said SEBI has already taken a series of measures to temper excessive retail participation and speculative trading in the futures and options (F&O) segment, where a large majority of individual investors lose money.

“This is a very sensitive subject and also has a lot of nuances… There is a problem, and the problem is being highlighted by the SEBI itself,” Pandey said in response to a question on the regulator’s stance following the Padmanabham Committee’s recommendation to phase out weekly options.

Pandey noted that SEBI has been following a calibrated approach to improve the derivatives market, implementing changes in phases after extensive consultations with market participants.

“We have taken a series of measures… after wide consultations,” SEBI chief said, adding that some of them have already kicked in, some will take effect as late as December 1.

Referring to the regulator’s steps, Pandey said SEBI had issued guidance restricting the number of expiry days and limiting trading to one index on a given day, aimed at curbing “irrational exuberance” among less-experienced investors.

However, he cautioned that an outright shutdown of weekly options would not be neither practical.

“How can we just shut down the market just like that?” Pandey remarked.

He added that SEBI will continue to analyse market data and hold further public consultations before considering any fresh interventions.

“Any further development, we will put it out in the form of a public consultation so that everyone can then chew on that, and we will also do further data crunching on that,” he said.

Pandey’s comments come amid ongoing debate over the rising retail losses in the derivatives market. SEBI’s own research has shown that around 93% of individual traders in the F&O segment lose money, raising concerns about financial literacy and risk management among small investors.