SEBI aims to balance investor protection while addressing growing demand for derivatives and IPO investments
Mumbai
The Securities and Exchange Board of India (SEBI) is considering extending the tenure of equity derivatives contracts to deepen markets and offer investors greater flexibility, Chairman Tuhin Kanta Pandey said on Thursday. Derivatives trading has expanded rapidly in recent years, attracting more retail investors.
To curb risks of excessive speculation, SEBI had earlier limited contract expiries and increased lot sizes, making trades costlier and more disciplined. Now, the regulator is working with the Ministry of Corporate Affairs and stock exchanges to create a regulated platform carrying reliable data on unlisted firms preparing for public listings. Pandey said this will help investors assess pre-IPO companies before committing funds.
The move highlights SEBI’s aim to balance investor protection with the rising demand for derivatives and IPO investments.
Separately, SEBI recently released a consultation paper proposing changes to IPO rules for very large companies. At present, such firms are required to sell a large portion of their shares at the time of listing, often resulting in massive IPOs that strain market capacity.
The new proposal suggests easing the minimum public offer requirement and giving companies more time to meet public shareholding norms. This would allow them to sell shares gradually instead of all at once.
Another suggested change is reducing the share reserved for retail investors in IPOs above ₹5,000 crore—from 35 percent to 25 percent. SEBI believes this would balance investor participation while ensuring smoother handling of large listings.