Revenue Secretary Announces STT Hike in F&O to Curb Speculative Trading and Mitigate Systemic Derivatives Risk

The Revenue Secretary has confirmed that the recent increase in the Securities Transaction Tax (STT) on Futures and Options (F&O) trading is a strategic measure aimed at discouraging speculative activities and addressing systemic risks within the derivatives market. This policy adjustment reflects a deliberate effort to enhance market stability by reducing excessive speculation, which can amplify volatility and pose broader financial threats. The move underscores the government's commitment to fostering a more resilient trading environment, prioritizing long-term investment over short-term gains. Analysts suggest that while this may initially impact trading volumes, it is expected to promote healthier market dynamics and align with global regulatory trends focused on risk management. The decision highlights ongoing efforts to balance market growth with necessary safeguards, ensuring the derivatives segment contributes positively to economic stability without undue exposure to speculative pressures.