F&O Expiry Day To Be Either Tuesday Or Thursday, No Changes Without Prior Nod: SEBI

The Securities and Exchange Board of India on Monday introduced new regulations for equity derivatives, mandating that all such contracts must now expire exclusively on either a Tuesday or a Thursday.

Each exchange is permitted to select one of these days for the weekly expiry of its benchmark index options contract, as per the SEBI circular. Furthermore, exchanges are required to obtain prior approval from SEBI before making any changes to their chosen expiry day.

The regulator has also asked the exchanges to submit their preference on which expiry day they wish to follow by June 15.

The decision comes after SEBI released a consultation paper in March and discussed the feedback with its Secondary Market Advisory Committee.

This marks a shift from the current system, where exchanges were free to choose their own expiry days. SEBI believes this change will help reduce concentration risks and avoid the possibility of trading spikes around multiple expiry dates. It also wants to prevent a return to the kind of excessive expiry-day activity that could hurt investors or destabilise the market.

All other equity derivatives, including single stock futures and options, non-benchmark indices, and benchmark index futures, must now have at least a one-month duration. These will all expire in the last week of each month, again on the exchange’s chosen day.

SEBI has asked stock exchanges and clearing corporations to make the necessary rule changes and system updates to put this into effect.