New Delhi, July 21 -- After a scathing interim order on US hedge fund Jane Street, capital markets regulator Securities and Exchange Board of India (Sebi) sought feedback from brokers last week on ways to deepen markets and promote products more suitable for retail investors who have lost fortunes trading weekly options, according to two brokers who requested anonymity.

"Sebi is not against derivatives trading, but does not want short-term frenzy to overcome retail investors' judgement," said one of the brokers. "The regulator wanted to gauge how the index futures segment could be made more liquid, and certain tax-related issues were also discussed. These discussions were exploratory in nature, and we expressed our views."

Jane Street a...