NSE MD & CEO Ashish Chauhan on March 7 said all exchanges need to have a common expiry day for derivatives contracts, as otherwise many other exchanges could apply for contracts expiring on various days of the week and defeat the market regulator's intent.
On October 1, 2024, the Securities and Exchange Board of India (SEBI) introduced new regulatory norms for index derivatives. One of the new rules was that each exchange can have weekly expiry for only one benchmark index. This was done to reduce expiry day trading, which the regulator believed was largely speculative.
"There should be single expiry date for all exchanges in a week instead of every exchange having different day for their own contract expiry in a week," said Chauhan days after NSE announced change in its F&O expiry to Mondays instead of Thursday effective April 4.
He was speaking at Moneycontrol Global Wealth Summit 2025 at a session titled "SIPs, F&Os & Saving Mindset: Sustaining India's Equity Boom".
Otherwise, according to Chauhan, the regulator's intent of reducing expiry days may be defeated. He said, "As of now, there are two to three more exchanges (MSEI, NNCDEX, etc.) trying to come up with their daily expiry on different dates defeating the purpose of SEBI’s regulations to not have too many expiries in a week to protect small investors. There might be many more new exchanges that may come up and ask for their additional days in a week for their own daily expiries which might require other days to be added in to the week."
Therefore, Chauhan added, there should be a single expiry day for all exchanges in a week.
Ananth Narayan, whole-time member, SEBI said the regulator is there for derivatives and that he's happy with the steps taken to curb speculation on expiry day. "Trading in index options have come down without affecting the whole family of derivatives as a whole. We are happy with the outcome."
"The regulatory intent which was co-created with market participants is clear. We did find it necessary to reduce volumes on expiry day," he added.
"We will be watchful of incoming data. Our regulatory intent is clear. There are plenty of metrics that has shown that the size of our derivatives markets in relation to our market cap has been extraordinarily high compared to global standards. Why we said we have to take steps... we found that 89 percent of F&O investors have loss. 93 percent of all trades mostly in index derivatives were losing money. People who were losing two years in a row continue to trade in the third year as well. Options trading was becoming a national pastime and we needed to use our national resources for better purpose," added Narayan.
Chauhan also applauded the regulator for improving trust of investors in the market and for thus driving up participation. He said, "SEBI has done well in getting newer regulations in place. All tough looking regulations brought in by SEBI in last five years or 30 years have won more investors' trust and brought more (market) participants. NSE fully supports all SEBI measures."
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