Lok Sabha Question No. 2473 (UNSTARRED), answered on 2025-12-15
Subject: Regulations for Retail Investors
Ministry: FINANCE
Asked by: Shri Rao Rajendra Singh

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 2473 TO BE ANSWERED ON MONDAY, DECEMBER 15, 2025/AGRAHAYANA 24, 1947 (SAKA)

## REGULATIONS FOR RETAIL INVESTORS

## 2473. SHRI RAO RAJENDRA SINGH:

Will the Minister of Finance be pleased to state:

- (a) whether the Government has taken note of SEBI's recent findings that nearly 90% of individual traders in the futures and options (F&O) segment incur losses, with retail investors  collectively  losing  over  1.06  lakh  crore  in  FY  2024 -25,  if  so,  the  details thereof;
- (b) the details of SEBI's action against entities allegedly involved in manipulative trading practices that create abnormal volatility in index options;
- (c) whether the Government proposes to strengthen regulatory safeguards to protect retail investors from such speculative and high-risk trading activities; and
- (d) if so, the measures being considered by the Government to improve investor education, curb  excessive  speculation  and  ensure  greater  transparency  in  algorithmic  and derivatives trading?

## ANSWER MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

Ans (a) Securities and Exchange Board of India (SEBI) 's report states that individual traders incurred net losses of Rs. ₹ 1,05,603 crore in FY25 in the futures and options (F&O) segment.

Ans(b):    SEBI  has  initiated  enforcement  action  against  four  entities  for  their  alleged involvement in price and volume manipulation in the equity and equity derivatives segments during the period January 1, 2023 to March 31, 2025.

And (c to d): SEBI has put in place regulatory and surveillance measures for effecting market stability and for the protection of the interests of investors in the stock market:

1. To strengthen the F&O segment, SEBI has undertaken a set of measures from October 2024 onwards including rationalization of weekly index derivatives products, increase in  tail  risk  coverage  on  the  day  of  options  expiry,  increased  contract  size  for  index derivatives, rationalization of monthly index derivative products, upfront collection of option premium from buyers, removal of calendar spread treatment on the expiry day and intraday monitoring of position limits. In May 2025, SEBI took further measures aimed at streamlining the expiry days of various derivative contracts across multiple exchanges  and  implementing  appropriate  risk  metrics  for  position  limits  for  better monitoring and disclosure of risks in F&O.
2. SEBI has also mandated risk disclosure to individual traders- mandated brokers to make a disclosure that '9 out of 10 Individual traders made losses in F&O in FY22', when the users log in to the trading platform.
3. SEBI  has  stipulated  a  regulatory  framework  for  all  algorithmic  trading  in  Indian securities markets, including prior registration of  Algo  with  stock  exchanges, maintenance of detailed  logs and audit trails to  track  algorithmic  activity,  real-time monitoring systems to prevent algo misuse etc.
4. SEBI, in coordination with stock exchanges and depositories, also carries out regular investor education and awareness programs across different parts of the country. These free-of-cost programs, inter alia, cover various topics such as basic investing principles, product features, risks involved, investor rights and responsibilities, common features of investment scams, pump and dump schemes, healthy digital practices, etc.
5. In  FY25  35,734  investor  awareness  programs  have  been  conducted  by  SEBI  in coordination  with  Market  Infrastructure  Institutions  (MIIs),  covering  724  districts across 36 States and Union Territories.

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