NSE Warns STT Hike on Equity Futures Harms Long-Term Investors, Urges Review

• National Stock Exchange (NSE) cautions that the recent increase in Securities Transaction Tax (STT) on equity futures could negatively impact long-term investors and market depth.
• NSE officials stated that the higher trading tax on equity derivatives raises costs for investors utilizing futures for hedging and long-term risk management, not solely for short-term speculation.
• The exchange has formally requested the government to review the STT hike in the futures and options (F&O) segment, arguing it might deter participation and affect liquidity.
• NSE expressed optimism that the government will reconsider its decision, acknowledging the crucial role derivatives play in price discovery, hedging, and capital market efficiency.
• The government had increased STT rates on equity futures as part of broader efforts to curb excessive speculative activity in derivatives trading.