10 February 2026 Punjab Khabarnama Bureau : The Securities and Exchange Board of India (SEBI) has put on hold the entry of the National Commodity and Derivatives Exchange (NCDEX) and the Metropolitan Stock Exchange of India (MSE) into the options trading segment, according to a media report. The move comes amid heightened regulatory scrutiny of the fast-growing derivatives market.
Sources familiar with the matter said the market regulator has asked both exchanges to address certain concerns related to market readiness, risk management systems, and overall impact on retail investors before granting approval to launch options contracts.
Why SEBI Is Being Cautious
SEBI’s decision is reportedly linked to its broader effort to rein in excessive speculation in the derivatives market, especially in options trading. Over the past few years, options volumes—particularly index and commodity options—have surged, raising concerns about systemic risk and investor protection.
Regulatory officials are said to be keen on ensuring that only exchanges with robust infrastructure, surveillance mechanisms, and liquidity depth are allowed to offer options products.
Impact on NCDEX and MSE
NCDEX, which is primarily focused on agricultural commodity derivatives, has been exploring options trading to diversify its product offerings and attract more participants. A delay in approval could slow its expansion plans and limit new revenue streams.
Similarly, MSE, which has been attempting to revive trading volumes and regain relevance in India’s exchange ecosystem, was expected to use options products as a growth lever. The regulatory pause is seen as a setback to those ambitions.
Broader Regulatory Context
SEBI has recently introduced several measures aimed at curbing excessive retail participation in high-risk derivatives, including tighter margin norms, contract design changes, and enhanced disclosures. The regulator has repeatedly warned investors about the risks involved in options trading, noting that a large majority of retail traders incur losses.
In this context, SEBI is believed to be adopting a more conservative approach toward expanding the universe of exchanges allowed to offer options.
Industry View
Market experts say the regulator’s stance reflects a preference for stability over rapid expansion. “SEBI wants to ensure that the derivatives market grows in a responsible manner. Allowing more exchanges into options trading without adequate safeguards could increase volatility,” an industry participant said.
However, some exchange officials believe that with proper checks, expanding options trading to more platforms could improve competition and innovation.
What Happens Next
NCDEX and MSE are expected to engage further with SEBI to address the regulator’s concerns. Approval may be reconsidered once the exchanges demonstrate stronger risk controls, liquidity plans, and investor protection measures.
For now, the options market will continue to be dominated by established players, while regulatory oversight over derivatives trading remains tight.
Summary
SEBI has reportedly put on hold NCDEX and Metropolitan Stock Exchange’s entry into options trading, citing concerns over market readiness, risk management, and rising speculative activity in derivatives markets.