Athira Sethu
Kochi, 16 Feb 2026
Shares of companies operating in the capital market fell significantly at the beginning of trading on Monday due to new regulations imposed by the Reserve Bank of India (RBI). The new regulations were imposed to minimize speculative trading in the Indian stock and commodity markets.
The RBI has recently made stricter regulations regarding companies that practice proprietary trading, which involves trading by a financial institution using its own money in order to earn profits. The new regulations are intended to minimize risky trading practices and promote more prudent market behavior.
According to the new regulations, all loans extended to securities companies must be collateralized. Furthermore, brokers will not be permitted to obtain loans for proprietary trading or investment purposes. The new regulations, referred to as “prudential regulations,” will come into effect for brokers and other capital market intermediaries on April 1.
Proprietary trading firms accounted for over 50% of equity options traded on the National Stock Exchange (NSE) last year, and 30% of cash equities. These firms contributed largely to the overall market trading volume. However, with the new regulations imposed by the RBI, and the recent hike in transaction taxes, there are fears that the overall market trading volumes may decline.
In addition, the RBI has also imposed a regulation that states that any guarantee issued by banks for proprietary trading must be fully collateralized. At least 50% of this collateral must be in cash, while the remaining portion can be in the form of government securities or other cash equivalents. This will restrict the nature of securities that can be used as collateral by firms when borrowing from banks.
Consequently, the stock prices of various firms in the capital market industry declined due to these developments. The stock price of BSE Ltd declined by nearly 9.5%, Angel One’s stock price declined by 6%, while Groww’s parent firm, Billionbrains Garage Ventures, declined by more than 4%.
