Securities Exchange Board of India or SEBI chairman Tuhin Kanta Pandey has noted that we are looking to deepen the cash equities market, which is the true foundation of capital formation. Volumes in cash market have grown rapidly doubling in terms of daily traded volumes over a period of just three years. However much more needs to be done. He opined that equity derivatives play a crucial role in capital formation, but we must ensure quality and balance. We will consult with stakeholders on ways to improve, in a calibrated manner, the tenor and maturity profile of derivative products, so that they better serve hedging and long-term investing. Ensuring risk awareness and suitability is equally important and constructive ideas for appropriate stakeholder engagement will be much needed to achieve this goal. The task of capital formation in the face of global headwinds in the era of geo-political and geo-economic fragmentation is a daunting challenge. We need to put our heads together to meet the challenge.

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