By Ananya Grover
The Securities and Exchange Board of India (Sebi) has stuck to its guns by mandating a two-day weekly expiry regime for stock exchanges. In a circular on Monday, the markets regulator said that the expiries of equity derivatives contracts of all exchanges will happen either on Tuesday or Thursday and has asked exchanges to seek its approval before launching or modifying any contract expiry or settlement day.
The circular comes amid increasing competition between the BSE and NSE for market share in the futures and options (F&O) segment. The regulator had floated a consultation paper on the same in late March following NSE’s announcement to shift the weekly and monthly expiry day for Nifty contracts to Monday — just a day before BSE’s expiry on Tuesday.
As of March 2025, BSE’s market share in the derivatives market was at 36.5 per cent, having significantly risen from 4.2 per cent in the second quarter of FY24.
Following the market regulator’s guidelines, sources said that NSE is likely to seek Tuesday as expiry day for its derivative contract, as it could compress BSE’s trading activity into just two days per week. This could potentially shifting market share back toward NSE. At the same time, industry players believe that limiting expiry days to Tuesday or Thursday could help smoothen market activity, besides reducing the burden on surveillance systems. In addition, retail investors who have been going overboard on derivatives market would see simpler trading patterns.
According to the regulator, in the multi-exchange framework, spacing out of expiry days through the week reduces concentration risk and provides an opportunity to stock exchanges to offer product differentiation to market participants. “At the same time, too many expiry days has the potential to revive expiry day hyperactivity which could jeopardize investor protection and market stability,” it noted. The regulator has asked the exchanges to submit their proposals by June 15.
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