Sebi To Issue Directions On Derivatives Contracts Expiry This Month

Markets regulator Sebi will issue directions this month over expiry of equity derivatives contracts after analysing the comments on the consultation paper, its chairman Tuhin Kanta Pandey said on Thursday. Sebi, in its consultation paper issued in March, proposed that the expiries of all equity derivatives contracts across exchanges be uniformly limited to either Tuesdays or Thursdays.

This would help optimize the spacing between expiries and avoid designating either the first or last day of the week as the expiry day. Talking to reporters, Pandey said, "Right now, whatever framework is there, we will be issuing a post-consultation paper and we will be analysing the comments. The committees have met and soon we will be issuing a clarification within this month". When asked whether expiries will be shifted to Tuesday or Thursday, he said "Those days are fixed now.

No change in the current thing but changes further". Sebi, in its consultation paper, also proposed that exchanges should seek Sebi's approval before launching or modifying any contract expiry or settlement day. "Every exchange will continue to be allowed one weekly benchmark index options contract, on their chosen day (Tuesday or Thursday)," the regulator had proposed. Following the consultation paper, the National Stock Exchange (NSE) has deferred its plan to change the expiry day of all index and stock derivatives to Monday from Thursday until further notice.

The shift, which was scheduled to take effect on April 4, 2025, would have seen all index and stock derivative contracts move from Thursday to Monday. To expand the product landscape and to support the dynamic needs of the growing economy, Pandey said that Sebi has granted in-principle approval for electricity derivatives -- a potential tool to hedge against the volatility in the energy sector. Also, Sebi chief said the regulator aims for optimum regulation and intends to remove redundant provisions.

"In the securities market ecosystem, we are focussing on optimum regulation. We intend to simplify regulations, remove redundant provisions and facilitate ease of compliance, while ensuring high market integrity and robust investor protection. To achieve these objectives, we need support from the industry as a trusted partner". The regulator remains committed to promoting ease of doing business in the securities market through regulatory simplification, faster approvals, and technology-driven oversight.

"We are committed to a framework of optimum regulation--one that ensures investor protection while allowing businesses to innovate and thrive," Pandey said. He also spoke about technology playing a pivotal role in reshaping the capital markets and asked market participants to proactively adopt technology-driven solutions to strengthen internal processes and risk management frameworks. On the regulatory front, technology is a powerful enabler in strengthening surveillance, enhancing supervisory effectiveness, and minimising market misconduct, he added.

(PTI)