SEBI Considers Ending Weekly F&O Expiry, BSE Shares Drop over 4.5%

Shares of the Bombay Stock Exchange (BSE) fell sharply on September 11 after reports emerged that the Securities and Exchange Board of India (SEBI) is contemplating a shift from weekly to monthly derivatives expiries. According to CNBC-TV18, the market regulator may soon float a consultation paper outlining the transition, including a defined glide path and potential same-day expiry across exchanges.

Market Reaction

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Ata of now on September 11, BSE share price were trading over 4% lower at ₹2,159.60 per share. The Nifty Capital Markets index also declined, trading over 1% lower at 4,270.50, with Angel One leading losses by dropping nearly 5%. Investors reacted cautiously to the possibility of longer-tenure derivative contracts, fearing potential impacts on trading volumes and liquidity.

SEBI’s Plans and Consultations

SEBI has reportedly scheduled a briefing on longer derivative tenures for its board on September 12. Consultations with exchanges are expected to begin next week. The consultation paper is likely to outline the framework for transitioning from weekly F&O contracts to monthly expiries, taking into account market impact and operational feasibility.

Last month, SEBI Chairman Tuhin Kanta Pandey highlighted the need to increase the tenure of equity derivatives. He described the initiative as a “thought process” and emphasised that industry consultation will precede any final decision. “All this will be done in consultation, in what form, how, when… Yes (there will be a consultation paper). I can't tell you when, but that is the thinking process we have,” Pandey had stated.

Background

The equity derivatives segment has been under regulatory focus in recent months. SEBI has already capped weekly contracts to one per exchange and fixed contract expiry days to manage excessive trading and speculative risks. Analysts suggest that any extension in the tenure of derivative contracts could influence trading volumes and impact revenue for exchanges and broking companies.

Market participants are closely monitoring these developments, as the move could reshape trading strategies and liquidity dynamics across the Indian derivatives market. While the regulator aims to balance market efficiency with investor protection, investors are wary of potential short-term disruptions.

Conclusion

The steady strength of systematic investment plan (SIP) contributions is one of the main reasons supporting the AMC rally. Even if lump-sum inflows were less strong in August 2025, SIP flows were still strong at ₹28,270 crore. This demonstrates how resilient individual investors are, as they persist in allocating their resources to equity markets through consistent monthly investments.