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The Securities and Exchange Board of India (Sebi) has sought the latest quarterly profit-and-loss (P&L) statements of clients from top brokers to assess the full-year financial impact of equity derivatives trading on individual investors, according to two broking officials.
"The regulator had directed us to submit the data sometime last week," said one of the officials, requesting anonymity.
"The January-March data of the previous fiscal year has been called for by Sebi, which will give them a view of the full year's P&L. Earlier, we had submitted Q1-Q3 data after the end of each quarter," said the second official.
An email sent to Sebi went unanswered till press time.
Alarmed by losses of individuals trading in the equity derivatives segment (EDS), Sebi has been requisitioning quarterly P&L data from the top 10 equity brokers whose clients account for 90% of the derivatives volumes on NSE and BSE, per the second official.
The regulator had used the data for two studies—one in September 2024 and the other in July last year—to analyse the P&L of individual traders from FY22 through FY25.
The studies showed that individual or retail traders suffered rising losses during this period. In FY25, lakhs of retail traders suffered losses of ₹1.05 trillion, up 41% from the preceding fiscal year.
"The latest quarterly data could give Sebi the full picture of the P&L for FY26 and may help it assess the impact of various measures undertaken in late FY25 and in FY26 on trading volumes and retail participation," said Rajesh Palviya, senior vice president (derivatives & technical research) at Axis Securities.
If retail losses remained elevated, the regulator could consider a product suitability framework (PSF) for participation in derivatives trading. Palviya said while clarifying that he was unaware of brokers being asked for the data.
"Income or awareness criteria could be the basis for allowing individuals to trade on EDS under the PSF," said the first broking official. "Those below an income threshold could be barred from EDS."
Sebi has taken several measures since November 2024 to curb derivatives frenzy. Some of these include tripling contract size, rationalizing weekly option expiries to one per exchange from multiple earlier, changing the calculation of open interest to accurately assess risk and introducing a gross ₹10,000 crore per day limit for EDS participants.
However, going by the combined premium turnover of NSE and BSE in index options, the most popular product in EDS, the measures to cool the retail frenzy appear not to have had an impact. The combined turnover was 9% higher at ₹173.21 trillion, per NSE and BSE data. However, this is also because the indices remained very volatile on account of the Trump's tariffs and the war in Iran.
Top brokers by number of clients include Groww, Zerodha, Angel One, ICICI Securities, HDFC Securities, Kotak Securities, and SBI Cap Securities.
Ram Sahgal is a deputy editor at Mint. He has over 20 years of experience in journalism, with previous roles at The Intelligent Investor, Bombay Times, The Economic Times, and The New Indian Express. Between his media roles, he briefly worked at a commodities exchange before returning to his true passion, business journalism. Ram graduated in liberal arts from St Xavier’s College, Mumbai, where he studied films, which explains his move to Bombay Times, where he covered the film industry during the rise of Sunny Deol and Sanjay Dutt. He took a leap of faith to transfer to The Economic Times, and thanks to his restless mind, later moved to cover the commodities beat. Over the past three years, Ram has been tracking the stock markets at Mint. His focus areas include writing about market infrastructure institutions, brokerages, derivatives, and related regulations. His hobbies include spotting trains and understanding the locomotives that power them. In his free time, he takes his octogenarian mother out for drives and goes to the cinema with her on weekends. If he has a dream, it is to write a screenplay for a movie. For now, he enjoys viewing market data on NSE and BSE, observing the shifting mood of Mr Market, and conversing with market experts.