SEBI Fixes Equity Derivatives Expiry to Either Tuesday or Thursday

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  • Last Updated on 29 May, 2025

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SEBI equity derivatives expiry rule

Circular No. SEBI/HO/MRD/MRD-TPD-1/P/CIR/2025/76; Dated: 26.05.2025

1. Regulatory Snapshot

On 26 May 2025 SEBI issued a circular that limits the final‐settlement (expiry) day for all equity-derivatives contracts on a stock exchange to either Tuesday or Thursday. The rule applies across recognised exchanges (NSE, BSE, MSE, etc.) and takes effect after exchanges file their day selection with SEBI.

2. One-Time Choices & Future Changes

  1. Pick a Day – Every exchange must formally intimate SEBI whether it will run Tuesday or Thursday expiries and submit a transition plan by 15 June 2025.
  2. System/Rule-book Updates – Exchanges must amend bylaws, contract specifications, risk management and back-end systems to align all existing products.
  3. Prior SEBI Approval Needed – Any later proposal to shift the settlement day of an existing contract will require SEBI’s written consent.

3. Practical Implications

  • Brokers & Traders – Only two national expiry days a week simplifies rollover planning and may reduce “triple‐witching”–style spikes in volatility.
  • Exchanges – Must reposition product-strategy; for example, NSE (currently Thursday) has sought SEBI nod to migrate to Tuesday, which could affect rivals’ volume share.
  • Risk-Management Systems – Margin models can now concentrate liquidity buffers around two known peaks, aiding CCP stability.
  • Product Innovation – Exchanges retain latitude to launch new indices or sectoral options, provided they fit the Tuesday/Thursday template and observe the one-month minimum tenor.

4. Action Points for Market Participants

  1. Map existing positions expiring outside Tuesday/Thursday; anticipate contract specification changes.
  2. Update trading algos & expiry calendars to reflect the new settlement cycle.
  3. Review hedging strategies—especially short-dated option sellers—because same-week expiries will disappear for non‐benchmark products.
  4. Stay alert to exchange notices between now and August 2025 for cut-over dates and any staggered migration schedule.

By harmonising expiries to two fixed weekdays, SEBI hopes to strike a balance between orderly market operation and continued product differentiation—while giving exchanges, brokers and investors a clear, predictable timetable.

Click Here To Read The Full Circular

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied