With Sebi banning 59 entities for tax evasion through illiquid stock options, leading exchange BSE today said it has already taken precautionary and proactive measures to curb such instances.
A BSE spokesperson said the exchange has stopped trading deep out of money options from July 2015.
The bourse now provides trading in only 3 options series as compared to the 7 options series allowed by the regulator.
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"In Indian markets, close to 90 per cent equity derivatives contracts available are not traded every day and therefore illiquid.
"By stopping the trading in deep out of the money contracts, BSE has taken precautionary and proactive steps in this regard in July 2015. BSE is looking into the issue relating to price bands for stock options on the lines of equity markets," the spokesperson said in a statement.
"Sebi's ex-parte interim order talks about trading in illiquid stock options contracts leading to non-genuine and non-legitimate transactions," the statement said.
BSE has been pitching for discouraging speculative trading through derivative products and promote cash market transactions.
In another crackdown on entities misusing stock markets for evading taxes, Sebi today barred 59 entities, including HNIs, from securities markets and also referred the case to the Income Tax Department for further investigations.
The regulator found there were several entities who consistently made significant loss and others who consistently made significant profit by executing reversal trades in stock options on the BSE.
More than 950 entities have already been banned from capital markets by the regulator for suspected tax evasion of at least Rs 5,000-6,000 crore.
Following today's order, the number of barred entities in such matters has crossed 1,000. However, this the first instance of action on tax-evaders using stock options.
