Exclusive-India to tighten derivatives rules despite investor pushback, sources say

By Jayshree P Upadhyay and Ira Dugal

MUMBAI (Reuters) - India's markets regulator will tighten derivative rules to increase entry barriers and make it more expensive to trade as it tries to limit retail investors speculating on risky contracts, said four sources with direct knowledge of the matter.

Securities and Exchange Board of India (SEBI) will limit the number of options contract expiries to one per exchange a week and nearly triple the minimum trading amount, the sources said, in rules similar to those proposed in July, despite pushback from traders and brokers.

But SEBI will review some of its earlier proposals to increase margin requirements and to monitor intraday trading positions, according to the sources.

Authorities have been flagging risks from speculative trading by retail investors, who have been funnelling savings into India's booming options market.