SEBI Chairperson Confirms No Immediate F&O Changes After STT Increase

In a recent answer session, Tuhin Kanta Pandey, the chairperson of the Securities and Exchange Board of India (SEBI), affirmed that the regulator will maintain the current framework regarding the derivatives market, despite the recent increase in Securities Transaction Tax (STT) announced by Finance Minister Nirmala Sitharaman during the Budget 2026 presentation.

The Budget proposed an increase in STT on futures transactions from 0.02% to 0.05% and raised the tax on option premiums from 0.1% to 0.15%. These adjustments have already caused concerns within the market, particularly among participants engaged in the futures and options (F&O) segment, as transaction costs have significantly surged.

During the Q&A, Pandey was questioned about potential further regulations following the STT change. He confirmed that there will be no immediate regulatory interventions and that the current operations will remain in place. He stated, "When we as a regulator look at derivative markets, we do so in a very methodical manner based on data. At this moment, we are not contemplating any measures, and whatever framework that we have put in place, that will continue."

These remarks signal that SEBI is opting for a stabilising approach, allowing the market to adjust to the new tax regime. The interventions by the regulator seem to aim at avoiding additional pressure on traders during a time of heightened transaction costs.

Zerodha founder Nithin Kamath previously raised concerns that the tax hike might inadvertently steer traders toward options, a segment considered more speculative than futures trading. Kamath suggested that the shift could lead to further complications for investors.

Additionally, Pandey dispelled rumours regarding the cancellation of weekly expiry contracts in the derivatives market. He insisted that the operational guidelines will remain unchanged for now, reaffirming, "Our status quo is as it is going on—what our regulatory framework is. Up until now, there has been no mention of any change."

The comments from the SEBI chairperson imply a cautious yet stable regulatory environment for the F&O markets, suggesting that the regulator will observe the developments closely before considering any future interventions aimed at safeguarding investor interests.