(Reuters) – India’s markets regulator has proposed limiting the expiries of all equity derivatives contracts to either Tuesday or Thursday, to ensure optimal spacing for expiry dates.
The Securities and Exchange Board of India (SEBI), in a consultation paper published on its website on Thursday, said every stock exchange will be allowed one weekly benchmark index options contract, on their chosen day – either Tuesday or Thursday.
In October, SEBI lowered the number of weekly options contracts available for investors to trade to one benchmark index per exchange, among other measures to curb the frenzy in derivatives trading.
Since then, while exchanges have restricted their weekly contract expiries to one, they were trying to offer contracts expiring on different days of the week, going against the regulator’s objective of reducing opportunities for retail investors to speculate on such contracts.
On Thursday, SEBI proposed that besides benchmark index options, all other equity derivatives contracts, including single-stock futures and options, will be offered with a minimum tenor of one month, with expiry in the last week of every month on either Tuesday or Thursday.
The regulator also proposed that exchanges will now have to seek its approval for launching or modifying any contract expiry or settlement day.
SEBI has sought comments on the proposals from the public by April 17.
(Reporting by Nishit Navin in Bengaluru; Editing by Shailesh Kuber)
