New Delhi, May 1 -- Markets regulator Sebi Chief Tuhin Kanta Pandey has ruled out the possibility of an aptitude test for retail traders wanting to participates in the Futures & Options (F&O) segment, saying it is impractical and prone to regulatory overreach.

The Securities and Exchange Board of India (Sebi) had earlier introduced measures in November last year in a bid to curb excess speculation in derivatives. These regulatory steps came in the wake of a Sebi study that revealed a staggering 9 out of 10 retail investors lose money while trading in F&O instruments.

When asked about the industry's suggestion of introducing tests for retail investors before permitting them to trade in risky derivative products, Pandey clarified the regu...