The Securities and Alternate Board of India (SEBI) has allowed the NSE and the BSE to have Tuesday and Thursday, respectively, as the ultimate settlement day, or expiry day, for derivatives contracts.
Previous to this revision, the NSE’s expiry day for derivatives contracts was Thursday, and that of BSE was Tuesday.
“SEBI has agreed to the expiry day proposed by BSE (i.e. Thursday),” the BSE stated in a round.
In a separate round, the NSE stated that the regulator has agreed to the expiry day proposed by it, which is Tuesday.
To maintain the expiry day of derivatives contracts unchanged for already launched contracts, aside from long-dated index choices contracts, each inventory exchanges will suitably realign expiry day as per the apply adopted prior to now.
For brand spanking new contracts, inventory exchanges will proceed with their respective current expiry day for spinoff contracts which expire on or earlier than August 31, 2025.
For the brand new spinoff contracts which expire on or after September 1, 2025, the NSE will change the expiry date to Tuesday, whereas the BSE will change it to Thursday.
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The BSE stated that from September 1, 2025, month-to-month contracts would expire on the final Thursday of the month. The inventory change additionally stated that it’ll not introduce any recent weekly contracts on index futures from July 1, 2025.
“This divergence creates an attention-grabbing dynamic—whereas NSE strikes nearer to international requirements, BSE now has an opportunity to distinguish itself, although it might face liquidity fragmentation,” stated Puneet Sharma, CEO and Fund Supervisor, Whitespace Alpha CAT 3 AIF (Various Funding Fund).
The actual affect will probably be felt throughout the ecosystem – institutional traders might want to adapt to twin settlement cycles, brokers should replace collateral and danger techniques, and retail individuals would require steering to navigate the brand new panorama, he stated.
In a round issued final month, the markets regulator stated that expiries of all fairness derivatives contracts of an change will probably be uniformly restricted to both Tuesday or Thursday. It additionally stated that each change will proceed to be allowed one weekly benchmark index choices contract on their chosen day (Tuesday or Thursday).
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SEBI had stated that within the multi change framework, spacing out of expiry days by way of the week reduces focus danger and offers a chance to inventory exchanges to supply product differentiation to market individuals. On the identical time, too many expiry days has the potential to revive expiry day hyperactivity which might jeopardize investor safety and market stability.
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