According to two people with firsthand knowledge of the situation, India’s markets regulator is expected to tighten requirements for equities to be qualified for trading in derivatives and to request that brokers and mutual funds cease using unregistered financial influencers in their marketing activities.
The sources, who asked not to be identified because they are not authorized to speak to the media, said that these actions, which are intended to stop market manipulation in the wake of the sharp increase in the trading of complex financial instruments, are probably going to be discussed at the Securities and Exchange Board of India’s (SEBI) board meeting on Thursday.
To filter out derivatives associated with illiquid equities, the markets regulator said earlier this month in a discussion paper that stock derivatives should have enough liquidity and trading interest from market players.
