Too Much Too Soon

Sebi guidelines for longer tenure and maturity for derivatives can wait

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In March, when the Securities and Exchange Board of India (Sebi) proposed two weekly expiry days—Tuesdays and Thursdays—it noted, "in the multi-exchange framework, spacing out of expiry days through the week reduces concentration risk and provides an opportunity for stock exchanges to offer product differentiation to market participants. At the same time, too many expiry days have the potential to revive expiry day hyperactivity, which could jeopardise investor protection and market stability". The observation followed the perception that the stiff competition between the two leading exchanges—NSE and BSE—for market share in the derivatives segment was unhealthy for investors. More importantly, the regulator wanted retail investors to reduce their enthusiasm in the derivatives markets.