India limits derivatives expiry days to Tuesday or Thursday

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India limits derivatives expiry days to Tuesday or Thursday

BENGALURU (Reuters) -India’s markets regulator said that expiries of all equity derivatives contracts will be limited to either Tuesdays or Thursdays from next month, to enhance investor protection and market stability.

The Securities and Exchange Board of India (SEBI) said in a statement on Monday that spacing out of expiry days through the week reduces risk and enables stock exchanges to offer product differentiation.

SEBI said that “too many expiry days has the potential to revive expiry day hyperactivity which could jeopardize investor protection and market stability.” The change will come into effect on June 15.

In October, SEBI reduced the number of weekly options contracts available for investors to trade to one benchmark index per exchange, among other measures to curb a frenzy in derivatives trading.

Since then, while exchanges have restricted their weekly contract expiries to one, they have been trying to offer contracts expiring on different days of the week, going against the regulator’s objective of reducing opportunities for retail investors to speculate on such contracts.

SEBI said on Monday that exchanges will have to seek its approval for modifying the settlement day of derivatives contracts.

At present, India’s largest exchange National Stock Exchange (NSE) offers expiries on Thursdays, while competitor BSE Ltd offers them on Tuesdays.

NSE, in March, put on hold a proposed change of Nifty expiry days from Thursday to Monday from April 5, 2025.

(Reporting by Nishit NavinEditing by Tomasz Janowski and Susan Fenton)

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