Day trading in financial markets is posing regulatory challenges, and
the capital market and commodity futures market regulators are
considering a higher degree of rules on these.
The global body of regulators, The International Organisation of Securities Commissions (IOSCO), had recently conducted a survey of emerging economies’ financial market regulators. It had concluded there was a need for regulating day trading activity in a better way, as unregulated or loosely regulated day trading could pose several challenges
IOSCO has said, in its recommendation note to regulators highlighting potential risks of day trading, that, “Day traders enter into short-term positions and are leveraged. They also use a variety of trading strategies like momentum strategy, contrarian investing, index arbitrage, statistical arbitrage, merger arbitrage, range trading, scalping, etc.” It further said day traders impart liquidity to the market but day trading combined with high frequency and algorithm trading might lead to market integrity concerns.
When asked, a spokesperson of the Securities and Exchange Board of India said they were studying these recommendations.
The global body of regulators, The International Organisation of Securities Commissions (IOSCO), had recently conducted a survey of emerging economies’ financial market regulators. It had concluded there was a need for regulating day trading activity in a better way, as unregulated or loosely regulated day trading could pose several challenges
IOSCO has said, in its recommendation note to regulators highlighting potential risks of day trading, that, “Day traders enter into short-term positions and are leveraged. They also use a variety of trading strategies like momentum strategy, contrarian investing, index arbitrage, statistical arbitrage, merger arbitrage, range trading, scalping, etc.” It further said day traders impart liquidity to the market but day trading combined with high frequency and algorithm trading might lead to market integrity concerns.
When asked, a spokesperson of the Securities and Exchange Board of India said they were studying these recommendations.
SEBI, Now you can bring some dumb regulation and kill the liquidity starved Market
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