SEBI Denies Weekly Expiry Ban Rumours; BSE, Capital Market Stocks Bounce Back

SEBI Chairman Tuhin Kanta Pandey has dismissed reports suggesting that the Securities and Exchange Board of India is planning to eliminate weekly futures and options (F&O) expiry cycles. He called such media speculation “false and speculative” and reaffirmed that no immediate curbs on weekly expiries are under consideration. On August 6, the BSE share price was trading around 1.5% higher at ₹2,403 apiece after falling as low as ₹2,282 intraday.

Market Initial Reaction

Earlier reports triggered a sharp sell‑off in capital market stocks. Yesterday, BSE share price plunged over 5% intraday, touching ₹2,282 before rebounding. Angel One share price rose around 1%, and Motilal Oswal share price rose just over 1% as of writing. 

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SEBI Stance on Expiry Reforms

Pandey stressed that SEBI has no intention to curb weekly index expiries as of now, though the structure could be reviewed after further analysis. He emphasised the regulator’s commitment to strengthening derivatives market surveillance, particularly after the Jane Street manipulation investigation, while maintaining integrity in expiry-day trading practices.

SEBI recently tightened its watch on the derivatives market and stepped up oversight at both exchange and regulator levels, aiming to detect manipulation quickly and limit damage to retail investors. Weekly expiry modulation is not currently on the agenda.

Structural Reforms Remain on the Agenda

Pandey also indicated that while weekly expiry schedules aren't being banned, SEBI may revisit the structure—possibly exploring spacing between expiries or longer-tenure derivatives—once it assesses fresh data. Other reforms, such as increased margin requirements and STT tweaks, are under consideration. 

CNBC-TV18 reported that SEBI may ask the Ministry of Finance to consider lowering Securities Transaction Tax on cash market transactions and increasing STT on option trades.

In addition to voicing worries about the high amount of short-term F&O contracts, SEBI long-time member Ananth Narayan stated last month that the regulator will try to enhance the quality of the F&O market "by extending the tenure and maturity of the products and solutions on offer."

"As many experts have pointed out, our Indian derivative market ecosystem is unique, in that on expiry days, comparable turnover in index options are often 350 times or more the turnover in the underlying cash market –an imbalance that is unhealthy, with several potential adverse consequences," said Narayan at 11th Capital Markets Conclave of CII in Kolkata.

In a report released on July 7, SEBI stated that while the number of unique individual investors dealing in F&O is up 24% from two years ago, it is down 20% from the previous year.  According to the report, the traders who had the most degrowth from the previous year were those with total turnovers under ₹1 lakh.  When compared to two years ago, the bucket with the largest rise in unique investors in F&O was the same.

After considering transaction expenses, the report shows that individual traders' net losses increased by 41% to ₹1,05,603 crore in FY25 from ₹74,812 crore in FY24. According to a previous SEBI survey, the proportion of traders losing money in F&O was at a staggering 9 out of 10 investors.

Conclusion

SEBI’s denial of any immediate plans to ban weekly F&O expiries signals regulatory stability, but future structural reforms remain likely. As retail losses rise and intraday volatility grows, SEBI may explore longer-tenure derivatives, expiry spacing, and STT revisions. With market integrity and investor protection in focus, the regulator appears poised for data-driven adjustments that could reshape the F&O landscape in the coming quarters.