BSE, CDSL, Angel One, and other capital market stocks slide in trade; here is why

Shares of capital market-related firms, including BSE, Angel One, CDSL, Motilal Oswal and Anand Rathi declined between 1.5% and 4.5% on Tuesday, August 5, amid reports suggesting that the Securities and Exchange Board of India (SEBI) may soon introduce restrictions on weekly derivatives expiry.

The move is part of broader efforts to curb speculative trading activity in the options segment.

In response, SEBI is said to be evaluating a set of potential regulatory changes aimed at moderating speculative behaviour, particularly in the derivatives market.

Among the key measures under consideration is a shift from weekly to either bi-monthly or monthly expiries. Additionally, the regulator is reportedly weighing the possibility of increasing margin requirements for options trading while reducing them for cash market trades, a move designed to promote investment in equities and reduce risky derivative activity.

Another option on the table is imposing Securities Transaction Tax (STT). SEBI may propose increasing STT on options trading to make speculation costlier, while simultaneously reducing STT on cash market trades to incentivise long-term investment. However, any change in STT would require amendments through the Union Budget and therefore cannot be implemented immediately.

While these proposals are still in the early stages, SEBI is expected to release a discussion paper seeking stakeholder feedback.

Market participants worry that such regulatory tightening could adversely impact revenue streams for capital market intermediaries. A reduction in option trading volumes and expiry-day volatility—both significant drivers of market turnover—could lead to a fall in earnings for companies offering brokerage and clearing services.

This isn't the first time the market watchdog has taken aim at the F&O (Futures and Options) segment. Last year, SEBI mandated higher upfront margins and curtailed the proliferation of weekly expiries to protect retail investors. Despite these measures.

In a report released last month, SEBI revealed that retail investors suffered aggregate losses of ₹1.10 lakh crore in the F&O segment during the financial year 2024-25, marking 41% increase from the previous year’s losses. The alarming trend has intensified the regulator’s focus on reducing risk exposure for small investors, particularly those trading complex instruments without sufficient knowledge or capital.