Will not throw baby out with bathwater: Former Sebi member Narayan

Capital markets regulator Sebi will decide on the fate of weekly equity index option expiries only after assessing the impact of its latest measures taken in July and after a consultative process with market stakeholders, said Ananth Narayan, former Securities and Exchange Board of India (Sebi) whole-time member whose three-year eventful term ended on Thursday.

- Ram Sahgal & Satish John

The measures, intended to prevent market manipulation, included changing the method of calculating limits on clients’ outstanding positions, commonly referred to as open interest (OI)—a measure of money flowing into the market—and intraday monitoring of these limits. “With the delta-based limits and intraday monitoring introduced from July 2025, it is only fair that we assess their impact through the September quarter and beyond before deciding further actions,” Narayan told Mint in an interview a day before his term as a whole-time Sebi member ended.

He sought to clear the air on speculation surrounding an issue that has become a talking point across market circles—whether weekly Nifty and Sensex options will be discontinued in favour of longer-term contracts—ever since Sebi chair Tuhin Kanta Pandey first spoke about extending derivatives contract tenures during a Ficci event in August. Narayan underscored that it was imperative for Sebi to tread the fine line between a type 1 error—ensuring bad things don’t happen to investors—and a type 2 error—overzealous compliance, which leads to throwing the baby out with the bathwater.