The National Stock Exchange (NSE) has announced a delay in the implementation of the upcoming futures and options (F&O) expiry originally set for Monday, with a new start date now slated for Tuesday, April 4. This decision came late Thursday in response to a consultation paper issued by the Securities and Exchange Board of India (SEBI), which recommends that all equity derivatives expirations on exchanges be limited to either Tuesdays or Thursdays.

Purpose of the Delay

The primary goal behind this shift is to ensure that there are optimal intervals between expiries across different exchanges. This will help avoid designating either the first or last day of the week as an expiry date, thereby promoting smoother trading conditions.

According to an NSE circular, "Members are required to note that the implementation of this circular is deferred until further notice in light of SEBI’s consultation paper dated March 27, 2025, regarding ‘Final Settlement Day (Expiry Day) for Equity Derivatives.’"

Recent Changes in F&O Contracts

This regulatory proposal follows the NSE’s earlier decision to modify the expiry days for F&O contracts linked to major indices such as Nifty, Bank Nifty, FinNifty, Nifty Next50, and Nifty Midcap Select, shifting them from Thursday to Monday. The announcement detailing these changes was made on March 4.

The recent SEBI consultation paper also clarifies that exchanges will still be allowed to maintain one weekly benchmark index options contract on their selected day, either Tuesday or Thursday. Furthermore, all other equity derivatives, including benchmark index futures and single stock options, will have a minimum duration of one month, with expiries scheduled for the last week of each month on the chosen day.

Regulatory Requirements and Feedback

Moving forward, exchanges will need to obtain prior approval from SEBI for any new contracts or modifications to existing expiry or settlement days. Stakeholders have until April 17, 2025, to provide feedback on these proposals.

Aiming for Market Stability

SEBI’s overarching aim is to foster a stable and predictable environment for market participants regarding expiry days for equity derivatives across various exchanges. By properly spacing out expiry days, the regulator hopes to mitigate concentration risk, encourage product innovation, enhance risk management practices, and ultimately protect investors while ensuring market stability.

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