SEBI to Continue Weekly F&O Expiries, Cites Nuances and Gradual Reforms

SEBI Chairperson Tuhin Kanta Pandey, speaking at the Business Standard BFSI Summit 2025, indicated that the Securities and Exchange Board of India (SEBI) has no immediate plans to discontinue weekly futures and options (F&O) expiries. He acknowledged the valid concerns raised about increased retail investor participation in derivatives but stated that an outright ban would not be a feasible solution. Pandey described the issue as sensitive with many nuances, noting that SEBI itself has highlighted the problem.

Instead of a sudden discontinuation, SEBI is adopting a gradual, data-based approach to reform the derivatives market. Some of these reforms are already in effect, with others scheduled for implementation by December 1, 2025. These include measures like restricting the number of expiry days and allowing trading in only one index on any given day.

The regulator will continue to closely monitor derivatives trading data and analyze patterns before making any further policy changes. Pandey mentioned that any future developments would be put forth for public consultation, allowing for broader discussion and further data analysis.

Impact: Following the SEBI chief's comments, shares of BSE Limited and Angel One Limited, which had fallen significantly during intra-day trading due to speculation about stricter F&O limits, saw a recovery and closed in positive territory. BSE shares recovered from a nearly 4% fall to close 1.53% higher, while Angel One shares bounced from session lows, ending the day 0.7% down. This suggests that stability in F&O expiry rules is viewed positively by market participants and related companies. Impact Rating: 8/10

Difficult Terms: Futures and Options (F&O): These are derivative contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before a specific date. SEBI (Securities and Exchange Board of India): India's primary regulator for the securities market, responsible for ensuring fair trade practices and investor protection. BFSI (Banking, Financial Services, and Insurance): A sector comprising companies that deal with financial transactions and services. Derivatives: Financial instruments whose value is derived from an underlying asset or group of assets (like stocks, bonds, commodities, currencies, or interest rates). Index: A statistical measure used to track the performance of a specific segment of the stock market or the market as a whole, composed of a basket of securities (e.g., Nifty 50, Sensex).