The pace of fresh rule-making slowed in 2025, compared to 2024, as the Securities and Exchange Board of India (SEBI) shifted focus to implementing and enforcing existing regulations. “Last year was more about bringing out new consultation papers, whereas this year has been more about execution and enforcement of those circulars,” said Sandeep Chordia, chief operating officer at Kotak Securities. Excerpts:
Compared with 2024, do you think the pace of regulatory tightening slowed in 2025?
The pace at which new regulatory changes were coming in has definitely slowed down. Last year was more about bringing out new consultation papers, whereas this year was more about execution and enforcement of those circulars. The regulator has always taken the consultative route before coming out with any rule. This is a welcome thing. SEBI has given sufficient time for the industry to prepare for any new changes. It even deferred some of the circulars as recent as the T + 0 settlement, after hearing industry challenges, and extended the deadline for implementation by QSBs indefinitely.
Do you expect T + 0 to become operational in 2026?
It should. But there are multiple stakeholders, including exchanges, clearing corporations, brokers, bankers, custodians, whose systems need to undergo substantial changes. SEBI will give a right amount of time for the industry to prepare and make sure that it happens properly rather than through rushed implementation. T + 0 has a lot of operational difficulties, because everything has to happen on a real-time basis, and with the geographical separations, FPIs will also need to make a lot of changes.
Do you believe more tightening is needed in equity derivatives, especially in weekly expiries?
SEBI has much more data than the market. Around 93 per cent of retail investors lose money in derivatives, but it is not the regulator’s role to decide who should gain or lose, these markets are zero-sum. The concern was excessive churn on expiry days. Measures like increasing lot sizes and restricting weekly expiries were meant to curb unnecessary speculation. And they have worked. Derivative clients have fallen from about 40 lakh a month to 30 lakh, while average daily premium volumes remain largely unchanged.
The regulator is also looking at suitability criteria, but I think, India is sometime away from implementation of suitability framework.