NSE defers switching to Monday expiry after Sebi's consultation paper

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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 following markets regulator Sebi's consultation paper.

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. 

Earlier this month, the NSE had announced that Nifty weekly contracts, currently expiring on Thursdays, would be shifted to Mondays. Additionally, the expiry of Nifty monthly, quarterly, and half-yearly contracts was set to change from the last Thursday of the expiry month to the last Monday.

However, in light of Sebi's consultation paper, the exchange decided to delay the implementation of this change until further notice.

"Members are required to note that the implementation of this circular is deferred until further notice in view of Sebi consultation paper dated March 27, 2025 on final settlement day (expiry day) for equity derivatives," NSE said in a circular issued late night on Thursday.

In its consultation paper issued on Thursday, Sebi proposed that the expiries of all equity derivatives contracts across exchanges be uniformly limited to either Tuesdays or Thursdays.

This would help optimise the spacing between expiries and avoid designating either the first or last day of the week as the expiry day.

Furthermore, the regulator recommended 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 proposed.

The Securities and Exchange Board of India (Sebi) invited public comments on these proposals until April 17.

Derivative in financial markets typically refers to a forward, future, option or any other hybrid contract of pre-determined fixed duration, linked for the purpose of contract fulfilment to the value of a specified real or financial asset or to an index of securities.

Broadly, there are two types of derivative contracts -- futures and options. A futures contract means a legally binding agreement to buy or sell the underlying security on a future date, while options contract gives the buyer or holder of the contract the right (but not the obligation) to buy or sell the underlying asset at a predetermined price within or at end of a specified period.