BSE shares in focus: SEBI limits expiry days of equity derivatives contracts to Tuesdays or Thursdays

On Monday, May 26, capital markets regulator Securities and Exchange Board of India (SEBI) said expiries of all equity derivatives contracts across exchanges will be uniformly limited to Tuesdays or Thursdays.

This would help optimise the spacing between expiries and avoid designating either the first or last day of the week as the expiry day.

In its circular, SEBI said exchanges will now seek its approval before launching or modifying any contract expiry or settlement day.

"In the multi-exchange framework, spacing out expiry days through the week reduces concentration risk and provides an opportunity for stock exchanges to offer product differentiation to market participants.

"At the same time, too many expiry days have the potential to revive expiry day hyperactivity, which could jeopardise investor protection and market stability," Sebi said.

Accordingly, SEBI said expiries of all equity derivatives contracts of an exchange will be uniformly limited to either Tuesday or Thursday.

Further, every exchange will continue to be allowed one weekly benchmark index options contract on their chosen day (Tuesday or Thursday).

Also, benchmark index options contracts and all other equity derivatives contracts, such as all benchmark index futures contracts, non-benchmark index futures/options contracts, and all single stock futures/options contracts, will be offered with a minimum tenor of 1 month, and the expiry will be in the last week of every month on their chosen day (that is, the last Tuesday or last Thursday of the month).

To operationalise the framework, SEBI asked stock exchanges to submit their proposal to it by June 15.

Earlier in March, SEBI came out with a consultation proposing that the expiries of all equity derivatives contracts across exchanges be uniformly limited to either Tuesdays or Thursdays.

Following the consultation paper, the National Stock Exchange (NSE) deferred its plan to change the expiry day of all index and stock derivatives to Monday from Thursday until further notice.

The shift, which was scheduled to take effect on April 4, 2025, would have seen all index and stock derivative contracts move from Thursday to Monday.