Sebi takes aim at 'extremist' speculators, volatility with derivative rule

The move may curb excessive speculation in a market where derivatives trading is about 30-times that of the cash market.

The market regulator will make physical settlement of all equity derivatives contracts mandatory this year in a bid to reduce volatility and reinvigorate the process of borrowing and lending of stocks.

The Securities and Exchange Board of India (Sebi) had announced its plan to mandate physical settlement in April last year, without giving the timeline. The market regulator said in a statement Monday that the change in rules will be staggered from April to October depending on the market capitalisation of the company.

The move may curb excessive speculation in a market where derivatives trading is about 30-times that of