SEBI Sets Tuesday and Thursday Expiry for Equity Derivatives Across Exchanges

In an important regulatory intervention, the Securities and Exchange Board of India (SEBI) has introduced changes to the structure of equity derivatives contracts in the country. Seeking to address concerns around excessive market activity and concentration of trades on expiry days, SEBI has limited all equity derivatives expiries to only 2 days a week, Tuesdays and Thursdays. This move is part of a broader effort to ensure market stability and protect investor interests.

SEBI Limits Expiry Days to Tuesdays and Thursdays

As per the new guidelines, SEBI has directed that all equity derivatives contracts across exchanges will now expire exclusively on Tuesdays and Thursdays. Exchanges must also obtain prior regulatory approval before launching or modifying any contract expiry or settlement day. Each stock exchange will be allowed to retain only one weekly benchmark index options contract on either of the designated days and must submit their proposals to SEBI by 15 June.

“In the multi-exchange framework, spacing out of expiry days through the week reduces concentration risk and provides an opportunity for stock exchanges to offer product differentiation to market participants,” SEBI stated. The regulator also warned that “too many expiry days has the potential to revive expiry day hyperactivity which could jeopardise investor protection and market stability.”

Monthly Expiries and Exchange Adjustments

SEBI has further specified that, aside from benchmark index options, all other equity derivatives contracts must now carry a minimum tenor of one month. These contracts will expire in the last week of every month on a day chosen by the respective exchange.

Currently, NSE’s contracts expire on Thursdays, while BSE’s expire on Tuesdays. Following SEBI’s earlier proposal this year, NSE had to defer its plan to shift index weekly expiries to Mondays and has now formally requested Tuesday as its expiry day. If approved, analysts anticipate that BSE may shift to Thursdays to safeguard its market presence. Other exchanges like the Metropolitan Stock Exchange of India (MSE) and NCDEX must also comply with the 2-day expiry framework if they plan to introduce their own weekly contracts.

Read More: SEBI Plans Major Changes in F&O Rules to Ease Trading and Improve Risk Monitoring!

Conclusion

SEBI’s decision reflects a careful balancing act between market innovation and systemic stability. By narrowing the expiry days and mandating regulatory oversight, the framework aims to minimise risks while still allowing room for product differentiation and fair competition among exchanges.

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