The Bombay Stock Exchange (BSE) has approached the Securities and Exchange Board of India (SEBI) seeking approval to introduce monthly derivative contracts for additional indices. According to reports, the proposed expansion includes a few thematic indices, marking another strategic move by the exchange to boost its presence in the competitive futures and options (F&O) space.
While BSE’s proposal is a significant step, regulatory clearance may not come swiftly. Market sources indicate that SEBI is currently evaluating several broader changes in the F&O framework. These include modifications in delta calculations and proposals to limit weekly expiries to just 2 days. These evolving regulatory dynamics may delay BSE’s plans.
Since September 2024, BSE has introduced about 20 new indices, focusing on different market capitalisation tiers, sectoral themes, and weightings. These indices are designed to cater to various investor and institutional strategies, providing diverse benchmarking tools and passive investment options.
The newly launched indices hold potential utility across a wide spectrum of financial instruments. These include:
SEBI mandates strict eligibility norms for indices to be included in the monthly derivatives segment. Key criteria include:
These measures are in place to ensure liquidity, risk containment, and product relevance in the derivatives space.
As of now, BSE offers monthly derivative contracts on three indices:
The addition of more indices would potentially diversify BSE’s derivative offerings and provide a broader suite of products for hedging and speculation.
BSE’s proposal to extend monthly contracts to more indices reflects its intent to grow its F&O segment footprint. However, regulatory scrutiny and evolving market frameworks may influence the pace and outcome of this expansion.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 2, 2025, 3:22 PM IST
Team Angel One
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