Regulatory Steps May Impact Volumes In Market, Says NSE MD Ashish Chauhan

There is plenty happening in the market and for market participants. With the hike in securities transaction tax (STT) and restrictions in the number of weekly expiries each exchange has, it is an evolving environment for both participants as well as intermediaries.

On Muhurat trading day, November 1st, 2024, NDTV Profit spoke with Ashish Chauhan, Managing Director (MD) and Chief Executive Officer (CEO) of the National Stock Exchange, making it an opportune time to discuss these aspects with him.

Here are our 5 top takeaways for all stakeholders:

1. Minimal Immediate Impact from STT Hike: The STT increase has yet to significantly affect market participation, though further regulatory steps might influence trading volumes and investor behavior in the coming months.

2. Protecting Small Investors: SEBI’s recent framework aims to shield small investors from losses by controlling entry into complex products. The MD & CEO emphasised the importance of regulation to protect uninformed retail participants. He also suggested, that NSE, as an exchange, will not be taking any steps to insulate themselves from the impact this will have on their business.

3. Advice for Retail Investors: Emphasising on long-term investing, he advised retail investors to focus on a 3–5-year horizon rather than speculative trading. He strongly discouraged following market tips or unverified online content, advocating for trusted information sources.

4. Sustained Market Growth: Despite a higher base, the exchange has grown its user base by 25% in the past year, reaching 10.5 crore unique investors. This expansion reflects increased participation from India’s rising middle class, fueled by higher incomes and a growing savings culture.

5. India's Long-term Growth Potential: With favorable demographics and technological adoption, India mirrors China's rapid economic rise in 2004. The MD and CEO believes India is well-positioned for sustained growth over the next two to three decades, driven by robust investment opportunities and tech-driven wealth creation.