Will SEBI end weekly expiry? This is the question dominating India’s derivatives market after reports surfaced that the Securities and Exchange Board of India (SEBI) is actively considering phasing out weekly expiries for index futures and options. The market regulator is preparing a consultation paper to seek public feedback before making any final decision.
According to senior officials, SEBI’s internal data shows that a large proportion of retail investors lose money in short-tenure derivative trades. To address this, SEBI may shift towards monthly or fortnightly expiries to reduce speculative activity and bring more stability to the market. The proposal also includes standardising expiry days across exchanges to avoid confusion and reduce excessive volatility.
According to multiple sources, SEBI plans to issue a consultation paper within the next few weeks to solicit feedback from exchanges, brokerages, and market participants. Under consideration is a transition toward monthly (or possibly fortnightly) expiry contracts for index options, replacing most of the weekly expiries. Proposals may also include standardizing expiry days across exchanges and ensuring that expiries fall only on certain days (e.g. Tuesday or Thursday) for greater predictability.
However, the regulator has not yet made a final decision. In recent statements, SEBI chair Tuhin Kanta Pandey emphasized the thought process nature of these proposals, saying that any change would come only after detailed stakeholder consultation.
Market react on this report
Market reaction to the proposed changes has been sharp. Shares of BSE (Bombay Stock Exchange) and certain brokerage firms dropped following reports of potential elimination of weekly F&O contracts. Observers warn that ending weekly expiries could reduce liquidity in the derivatives market and alter trading strategies, especially for entities and traders who depend on weekly options for tactical hedging, speculative plays or arbitrage.
In parallel, SEBI has already taken steps to reduce excess volatility and align market structure. Weekly expiries have been limited to one benchmark index per exchange, and all exchanges have been directed to fix expiry-days to either Tuesday or Thursday.
What’s Next
- SEBI is expected to release a consultation paper soon (within a few weeks) that will outline the proposed changes and obtain inputs from market participants.
- The paper will likely present options such as monthly expiries, or a more gradual glide path (phasing out weekly contracts over time).
- Exchanges, brokers, and retail investors will need to adapt to reduced frequency of expiries, potential impacts on liquidity, and modifications in strategy.
- Any final implementation will depend on SEBI’s review of feedback, possible operational challenges, and preserving market stability.