By Veer Sharma
Copyright indiatimes
AgenciesSEBI ramps up options market regulation; delta-based OI and potential weekly options restrictions loom.
Zerodha co-founder and CEO Nithin Kamath has denied claims that capital markets regulator Sebi has initiated the consultation process to remove weekly options expiry.In a post on X (previously Twitter), he wrote, ‘There hasn’t been a consultation with any of the brokers to the best of my knowledge yet. SEBI always consults the industry players before big regulatory changes.”There hasn’t been a consultation with any of the brokers to the best of my knowledge yet. SEBI always consults the industry players before big regulatory changes. All this reporting based on “sources” without basic verification is not good journalism. pic.twitter.com/a1dzUdIUrP— Nithin Kamath (@Nithin0dha) September 25, 2025 According to multiple media reports, Sebi met with large brokerage firms to consult on derivative contracts. The reports added that the market regulator has asked brokerages to submit their suggestions in writing. Sebi is also expected to engage with other stakeholders, including exchanges, before releasing the final consultation paper.Earlier this month, in a post, Kamath acknowledged that, from an outsider’s perspective, a complete ban on weekly options could make sense. He added that he wouldn’t be surprised if weekly expiries were banned entirely or if Sebi introduced a stricter product suitability framework, making futures and options trading more challenging for retail investors.Live EventsAlso read: Hyundai shares rally nearly 90% from April lows. Can it turn multibagger?“Regulatory risk is by far the biggest risk for brokers like us. This risk is magnified even more because most brokers’ earnings are from traders, and we earn almost nothing from investors,” Kamath wrote, pointing to the sharp 40% fall in exchange option volumes since the number of weekly expiries was reduced. He added that if the remaining two weekly expiries were also removed, volumes would likely drop back to 2019 levels, a scenario that could force brokerages to rethink their business models, Kamath, 45, said.Over the past year, SEBI has been tightening regulations in the options market following multiple surveys highlighting heavy retail losses.Last month, the capital markets regulator floated the idea of extending the maturity and tenure of derivative contracts. More recently, Sebi introduced a fresh set of measures to strengthen the market, including a shift to delta-based calculation of open interest instead of the previous notional open interest method.This measure affects all major market participants and could potentially have a longer-term impact on trading volumes while reducing market volatility.(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)Add as a Reliable and Trusted News Source Add Now!
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