Shares of BSE Ltd tumbled over 6 per cent on Monday after Goldman Sachs cut its target price, flagging concerns over the market regulator’s proposed risk-monitoring rules that could curb proprietary trading and dampen market volumes.

Goldman Sachs reduced its target price for BSE’s shares to ₹4,880 from ₹5,650 while maintaining a “neutral” rating. The stock fell as much as 6.3 per cent to ₹4,343.65 during the session before closing at ₹4,366.

Last week, the Securities and Exchange Board of India (SEBI) proposed to replace the current notional terms approach for computing open interest (OI) in equity derivatives, with a future-equivalent or delta-based approach—aimed at curbing volatility in the derivatives segment.

This move could lower the industry’s options premium to cash equity turnover ratio from 0.4x to 0.3x, said Goldman Sachs. This could cap the market share of the average daily premium traded for index options contracts at 30 per cent, which was at 22 per cent in February.

The proposed changes, along with stricter monitoring of trading limits under SEBI’s F&O tightening, are expected to reduce activity from proprietary traders, who account for 70 per cent of BSE’s daily turnover.

Trading activity across the industry has been subdued, with both cash and options volumes underperforming expectations in February, the brokerage said. BSE’s Average Daily Turnover (ADT) in the cash segment also fell short of projections.

As a result, Goldman Sachs cut BSE’s earnings per share (EPS) estimates for FY25 to FY28 by up to 14 per cent, citing volume declines outweighing potential gains in options market share.

Adding to investors concerns, BSE and its officials are facing legal scrutiny after a Mumbai court took cognizance of an FIR filed against former SEBI chief Madhabi Puri Buch, two BSE officials, and others.