Securities and Exchange Board of India (Sebi) chief U K Sinha on Tuesday said that securities transaction tax (STT) should be used in such a way that it incentivizes people to make investments for the long term rather than reap short-term benefits. Sinha, the chairman of Sebi, also said that the STT rate is rather high now.

"... (STT) should be used in a manner that people (investors) are incentivized to invest for the long term rather than for short term (speculation)," Sinha told reporters on the sidelines of launch of National Stock Exchange's listing platform for small and medium enterprises (SMEs) here.

Noting that STT is the prerogative of the government, Sinha said it is not something where the market regulator can take a call. "Sebi's view has been that in securities market, the tax rate is rather high," he noted. According to him, taxes should be across various segments of various markets rather than only in the securities market. NSE MD and CEO Ravi Narain too echoed similar views.