Sebi expresses concern over high derivatives-to-cash turnover

Sebi issued a discussion paper on 'Growth and development of the equity derivatives market in India'

The Securities and Exchange Board of India (Sebi) has expressed concern over high equity derivatives turnover vis-à-vis cash turnover.

For every one rupee of cash turnover, Rs 15.6 (notional value) of derivatives is traded. The derivatives-to-cash turnover in India is the world's second highest, after South Korea, where it is 24 times. Australia, Japan and Spain have a derivatives-to-cash ratio of less than five.

The markets regulator has also raised concern over a lot of individual investors dealing in the derivatives space without understanding the risks.

Sebi on Wednesday issued a discussion paper on 'Growth and development of the equity derivatives market in