SEBI Mandates Fixed Expiry Days for F&O; NSE and BSE to File Choices

The Securities and Exchange Board of India (SEBI) has come out with a final circular instructing exchanges to file afresh for equity derivatives expiry days. This important move is expected to provide clarity and discipline to the expiry calendar of futures and options (F&O) contracts.

Under the new direction, each exchange will be permitted to choose one particular day of the week for its and their benchmark index options contracts. The available options for this weekly expiry day are either Tuesday or Thursday. The National Stock Exchange (NSE) currently has its F&O expiry on Thursday, and BSE Limited (BSE) has its F&O expiry on Tuesday.

In addition to the weekly benchmark index options, SEBI has also made the expiration calendar for other equity derivatives contracts clear. Such contracts would have their expiry in the last week of each month. Like the weekly options, exchanges have to select either Tuesday or the last Thursday of the month for the monthly contracts' expiry.

Exchanges need to file their proposals for the choice of these expiry days with SEBI on or before June 15, 2025. In addition, SEBI has made it mandatory for exchanges to obtain prior regulatory approval before making any changes to their selected expiry days in the future.

The market regulator had also debated the concept of fixed expiry days in a consultation paper dated March 27. SEBI mentioned the requirement for improved spacing in expiry dates. Exchanges were also requested to wait for the final circular before acting.

This regulatory step institutionalises the methodology for choosing and altering expiry days, with a clearer framework for derivatives market participants.

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