The National Stock Exchange (NSE) has announced a significant change regarding the weekly expiry of futures and options (F&O) contracts. In a circular released on March 27, the NSE has decided to postpone its earlier plan to shift the expiry day to Monday, following a consultation paper from the Securities and Exchange Board of India (SEBI). This announcement sheds light on the ongoing evolution of trading practices in India’s financial markets.
NSE Circular Details
The circular, titled “Revision in Expiry Day of Index and Stock Derivatives Contracts – Update,” indicated that the NSE has reversed its previous decision made on March 4, 2025, concerning the change in expiry days. The document, available on the official NSE website, informs all members of the F&O department that the implementation of the new expiry schedule will remain on hold until further instructions are provided.
Reasons Behind the Delay
This postponement is primarily in response to SEBI’s consultation paper, which was also released on March 27, 2025. The paper discusses the ‘Final Settlement Day (Expiry Day) for Equity Derivatives’ and highlights the need for exchanges to obtain SEBI’s approval before altering expiry days or settlement dates for contracts.
Insights from SEBI’s Consultation
SEBI’s proposal suggests that all equity derivative contracts should have their expiry on either Tuesdays or Thursdays. This recommendation aims to standardize expiry days across exchanges, thereby simplifying the trading process for investors.
Current Expiry Practices
As it stands, the NSE has all its contracts expiring on Thursdays. In contrast, the Bombay Stock Exchange (BSE) recently shifted its weekly F&O expiry to Tuesdays, moving away from the previous Friday schedule. Earlier this March, the NSE had planned to transition the expiry date for Nifty index weekly derivative contracts to Mondays, which would also affect other contract types like monthly and quarterly.
Expert Commentary
In an interview with CNBC-TV18 on March 10, NSE CEO Ashishkumar Chauhan expressed his views on SEBI’s approach to managing expiry days. He stated, “If the intention is to minimize daily expiries, having multiple expiry days won’t achieve that goal. A singular expiry day is essential for clarity and efficiency in trading.”
Conclusion
As the NSE navigates through these changes, traders and investors will need to stay updated on future announcements regarding the expiry days of F&O contracts. This ongoing dialogue between the NSE and SEBI reflects a commitment to enhancing the trading environment in India, ensuring it remains competitive and investor-friendly.
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