New financial year brings regulatory and tax changes for market participants

The start of the financial year has introduced a set of changes that are expected to influence trading behaviour and investor participation in the equity markets.

Among the key developments, transaction costs in the derivatives segment have been revised upwards, making futures and options trading relatively more expensive. The move is likely to affect high-frequency traders and retail participants who have been increasingly active in this segment over the past few years.

Changes in the income tax framework, which continue to evolve with policy adjustments, are also set to shape investment decisions. Market participants are assessing how these revisions could alter post-tax returns across asset classes, including equities.

In addition, updated rules governing share buybacks and compliance requirements for listed companies have come into effect. These measures are aimed at improving transparency and aligning corporate actions with evolving regulatory standards.

The combined impact of these changes is expected to be gradual rather than immediate. While trading volumes in certain segments may see a short-term adjustment, the broader direction of the market will continue to depend on liquidity conditions and macroeconomic factors.

For investors, the new framework underscores the need to factor in regulatory costs and tax implications more closely while planning allocations, particularly in segments where margins are sensitive to such changes.