IMPACT OF LEGAL POLICIES ON THE DEVELOPMENT OF EQUITY DERIVATIVES MARKET IN INDIA

The equity derivatives market in India has experienced significant growth and transformation since its formal inception in 2000, largely driven by the legal and regulatory environment established by the Securities and Exchange Board of India (SEBI) and other statutory authorities. This study explores the impact of legal policies on the development of the equity derivatives market, examining how regulations have influenced market structure, stability, investor participation, and product innovation. The paper analyses key regulatory interventions, case studies, and current challenges, while also offering recommendations for enhancing the effectiveness of the legal framework. It highlights the importance of simplifying and harmonizing existing rules, strengthening surveillance and enforcement mechanisms, integrating advanced technologies like blockchain and AI, and promoting investor education. The findings indicate that while legal policies have significantly contributed to market development and investor protection, continual policy innovation and stakeholder engagement are essential to sustaining the growth and resilience of India’s equity derivatives market.