Against limiting exposure for traders in financial markets #freetotrade

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The purpose of this petition is to prevent SEBI from implementing a new rule according to which an investor's/trader's exposure to the equity and derivates market will be calculated on the basis of their net worth/income tax return. The following articles are worth going through if you are unaware of the situation -

https://m.economictimes.com/markets/stocks/news/sebi-plans-to-cap-investors-equity-exposure-in-line-with-net-worth/amp_articleshow/65381833.cms

https://www.thehindubusinessline.com/opinion/columns/aarati-krishnan/is-sebi-being-a-nanny-to-investors/article23515378.ece

While the details regarding such a decision are unknown, the clear target is the retail investor. To speculate the implications of this decision, it might mean that the retail investor now may not be able trade his capital at his will as his participation in the financial markets now may become limited to a computed fraction of his networth or as his annualized income is. This might also mean higher margin requirements imposed on the retail investor in the derivatives segment. This obviously will have a negative impact on the financial markets in this country. While seamingly there's no upside to what SEBI is doing, the resulting downsides are too numerous to count.

1. To begin with, it is discriminatory to the retail investors. This is SEBI telling you that you are too poor so you can't trade or that different rules apply to you.

2. Secondly, retail investors are a significant portion of the financial markets and shunning them away means less overall volume in the market and we all know that means - less business for everyone i.e. that is the exchange, your friendly neighborhood broker, the government of india in the form of taxes and yes SEBI itself because yeah we pay a fee to SEBI for trading. On that note, all the fees we have paid to SEBI and this is what it does to us. A round of applause everyone for SEBI.

3. Anyway, sarcasm aside, we need to come to our third point which is that the Indian markets already have lower volumes compared to foreign markets and this is therefore a backward move. Clearly what we needed.

4. Fourth point is that there are those who trade for a living  They will be jobless if this happens and will be forced to work at McDonald's and such.

5. Fifth point is that either that happens or we move to international brokers for our needs and expose ourselves to foreign markets which is obviously less safe option because you are not protected anymore.

There are most definitely several points that can be come up with but I think we all get the gist of what is happening and how it will clearly negatively impact us. 

Having all said that, I request everyone that they sign this petition and forward it to as many people as they can. This petition will be forwarded to the concerned authorities so that the voice of the public can be heard and a stand can be made.

I also urge everyone to not just sit comfortably at their homes and sign a petition and hope that things work but also do whatever they can on their part that would help achieve this goal.

For starters, I have to say that this is just an online petition to get the word across. It can easily be dismissed. If we want to win this, we might need to file a Public Interest Litigation which is a petition in the court. That is going to need some ground work and that means coordinated support from all of you. 

In order to enable that we need to communicate with each other, so here's our Telegram group - 

https://t.me/joinchat/JG8hfVIc472fVwSlm9WwOg

Feel free to join.

 

 

 



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