Lok Sabha Question No. 23 (UNSTARRED), answered on 2025-02-03
Subject: Loss to Retail Traders
Ministry: FINANCE
Asked by: Shri Sribharat Mathukumilli

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

## LOK SABHA UNSTARRED QUESTION NO. 23 ANSWERED ON MONDAY, FEBRUARY 3, 2025/MAGHA 14, 1946 (SAKA)

## LOSS TO RETAIL TRADERS

## 23. SHRI SRIBHARAT MATHUKUMILLI:

Will the Minister of FINANCE be pleased to state:

- a) whether the recent analysis by SEBI revealed that retail traders collectively made a net loss of 1.81 lakh crore, with 93% of traders incurring losses;
- b) the details of the measures taken by SEBI after the study to address these findings;
- c) whether SEBI has undertaken any study or comparison of countries that have implemented similar regulations and the outcomes from such regulations;
- d) whether  the  Government  has  conducted  any  study  on  the  effectiveness  of  restrictive measures adopted by SEBI and if so, the details thereof and if not, the reasons therefor; and
- e) whether  the  Government  proposes  any  awareness  programme  for  traders  rather  than restrictive measures and if so, the details thereof?

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

- a): Securities and Exchange Board of India (SEBI) published a study on 23 rd  September 2024 on its website wherein it was found that the aggregate losses of individual Futures & Options (F&O) traders exceeded ₹1.8 lakh crore over the three-year period between 2021-22 and 2023-24 and that 93% of individual F&O traders incurred losses during the same period.

b) to d): SEBI has taken various measures, based on the recommendations of an Expert Working Group and consultations with various stakeholders, to strengthen the equity index derivatives framework for increased investor protection and market stability vide its circular dated  October  01,  2024.  The  staggered  measures  include  rationalization  of  weekly  index derivatives products being offered by exchanges, enhanced contract size for index derivatives and  increase  in  margin  on  short  options  position  on  the  day  of  expiry  -  with  effect  from November  20,  2024;  upfront  collection  of  option  premium  from  buyers  and  removal  of calendar spread treatment on the expiry day - with effect from February 10, 2025; and intraday monitoring of position limits with effect from April 01, 2025.

These measures were undertaken primarily to address the concerns of speculative trading in the F&O segment. The premium turnover and notional turnover data on F&O during OctoberDecember, 2024 indicate that such activity in index options has suitably moderated. However, since the measures are staggered, their impact will continue to be monitored.

- e): The Government has taken various steps to increase investor awareness and education, through SEBI and various other market intermediary institutions (MIIs). These programs for all  investors,  including  retail  F&O  traders,  cover  various  topics  such  as  basic  investing principles,  product  features,  risks  involved,  investor  rights  and  responsibilities,  common features of investment scams etc. They are conducted free of cost in various regional languages besides Hindi and English. The details of such Investor Awareness and Educational programs conducted during FY 2023-24 are as under

| Particulars                      | Total Programs conducted        |
|----------------------------------|---------------------------------|
| No. of Awareness Programs        | 43,826                          |
| No. of participants              | 27,93,653                       |
| States/UTs and Districts covered | 36 States/UTs and 687 Districts |

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