India's markets regulator, the Securities and Exchange Board of India (SEBI), has proposed new measures aimed at tightening rules in the derivative market. These proposals include a fresh approach to measuring risk in equity derivatives, which SEBI claims will not materially impact small investors. Additionally, SEBI is considering new criteria for diversifying non-benchmark indices and aims to limit the number of stocks entering a ban. The regulator is also responding to concerns from hedge funds about potential manipulation in the options market. In a related development, mutual funds are facing challenges, with only 26% of funds managing to outperform benchmarks in January, a decline from 61% in December. SEBI is expected to engage in discussions regarding the proliferation of thematic funds in an upcoming meeting, indicating potential conflicts with mutual fund companies.