Ashishkumar Chauhan, CEO of the National Stock Exchange of India (NSE), announced that the period of regulatory tightening in India's derivatives market is largely over. He noted that the NSE is now regaining market share in equity options as traders adapt to stricter rules, and the bourse is also experiencing growth in commodities. These comments were made a day after NSE's trading debut, marking the culmination of its decade-long journey to going public. Chauhan emphasized that the exchange's long-awaited listing signifies enhanced compliance, transparency, and governance.
The regulatory crackdown, including measures against Jane Street Group and other steps to curb excessive speculation, had previously cooled the derivatives market. While the average daily notional turnover for futures and options on the NSE declined 10% to 193 trillion rupees ($2 trillion) in August from July, the lowest since February 2025, Chauhan highlighted the NSE's resilience. Weekly equity options still contribute about 40% of the exchange's revenue, with the remaining 58% from equities, equity futures, and monthly options. Despite initial expectations of a 50-60% drop in volumes and revenues due to regulatory changes like reducing weekly expiries, the actual impact was much lower, with a roughly 3% decline in 2025-26 fiscal revenues before rebounding in the current fiscal year's first quarter.
The NSE is actively diversifying its revenue streams beyond equity derivatives. Chauhan highlighted new products and growth areas such as electricity futures, where NSE holds a 70-75% market share, and Electronic Gold Receipts (EGR), which he described as a "transformational product." The exchange is also working on a coal spot exchange and bond-index futures and options. Recent rule changes by the Securities and Exchange Board of India (SEBI), allowing foreign investors to trade a broader range of commodity derivatives, are expected to further boost NSE's commodity segment by attracting global funds and new investors.
