Brokers urge SEBI action on small investor losses in F&O

Several brokerage firms have urged the Securities and Exchange Board of India (SEBI) to take action to protect small investors from incurring significant losses in the futures and options (F&O) segment. The brokers have highlighted that a large number of retail investors are engaging in speculative F&O trading without a proper understanding of the high risks involved. Citing SEBI's own data, which shows that a vast majority of individual traders in the F&O market lose money, the brokers have called for enhanced risk disclosures and stricter suitability norms. They have suggested measures like mandatory online tutorials, risk profiling of clients, and restrictions on providing excessive leverage for F&O trading. The call for action aims to create a more responsible trading environment and prevent retail investors from being lured into complex derivative products that can lead to rapid and substantial financial losses.