Sebi pings bourses for plan details before expiry shift

As the battle for market share between India's top two stock exchanges heats up, the capital markets regulator has directed both to furnish modalities on a proposed shift in their weekly index options settlement dates by 15 June before it approves any changes, two people aware of the matter said.

- Ram Sahgal & T. Surendar

"The Securities and Exchange Board of India (Sebi) has instructed the bourses to apprise it about when they would issue a circular to their broking members on potential expiry day shift to ensure markets have enough time to adapt to the change," the first person said.

He explained that besides weekly index derivatives contracts, exchanges like BSE and NSE run three monthly contracts concurrently—for example, June, July and August (known as the front, mid and far months respectively)—on a rolling basis; i.e., after the June expiry, July becomes the front month, August the mid month and September the far month and so on.

Sebi wants to ensure that the investing community has enough time to adapt to the new expiry day before approving any shift, the person cited above said on the condition of anonymity.

Sharing of such information would enable Sebi to work out "a solution that would be acceptable to both the exchanges," the second person said.

Queries emailed to NSE, BSE and Sebi went unanswered.