In a move that could have implications for market share dynamics, the Securities and Exchange Board of India (Sebi) has permitted the National Stock Exchange (NSE) and the BSE to alter the days for settlement of equity derivatives contracts.
Derivatives contracts on the NSE will now expire on Tuesdays, moving from the current Thursday expiry.
Conversely, BSE contracts will expire on Thursdays, shifting from the current Tuesday expiry.
In May, the market regulator issued a circular restricting expiries to just two days a week and asked each exchange to select one.
The current expiry days will remain in effect until August 31.
Starting in September, both exchanges will transition to their newly designated days.
The expiry day for already introduced contracts will remain unchanged, except for long-dated index options contracts, which will be realigned.
Moreover, Sebi has directed the exchanges not to introduce any new weekly contracts on index futures from July 1.
Prior to Sebi’s decision to limit expiry days, exchanges had the flexibility to change their final settlement days for derivatives contracts, leading to frequent shifts over the past year.
When limiting expiries, Sebi said that the goal was to curb hyperactivity on expiry days and reduce concentration risk in the market.
The regulator had previously noted that spacing out expiry days throughout the week could provide stock exchanges with opportunities for product differentiation.
NSE had initially planned to shift expiries to Mondays but had to abandon the plan after Sebi’s consultation paper on expiry days, which was later approved in the regulator's March board meeting.
“NSE contracts are more liquid and are preferred by market participants.
"If NSE has expiries on Tuesdays, the premium just ahead of the expiry day will be lower compared to the beginning of the cycle.
"This will make it cheaper for participants to trade NSE contracts in the days leading up to expiry.
"NSE may see much more activity than what we see now,” said Sriram Krishnan, chief business development officer at NSE.
Analysts believe BSE could cede some market share due to the shift in expiry days.
“Since NSE requested Tuesdays, in the overall interest of the market, we have taken Thursdays.
"Market share and volumes are influenced by multiple factors.
"At this point, it is not possible to base our analysis solely on one factor.
"Traditionally, Thursday has been the day of expiries for the Indian market for a very long time,” said Sundararaman Ramamurthy, managing director and chief executive officer of BSE.
Shares of BSE have come off more than 10 per cent from their record highs hit last week amid concerns over market share loss.
Some analysts believe this is a short-term reaction and maintain a positive outlook on the company.
They believe that since trading patterns are traditionally set for Thursdays, the loss of market share may not be severe.
“With BSE moving its expiry to Thursday (currently Tuesday), it is expected to lose Rs 1,500–1,800 crore in average daily premium turnover (ADPTV).
"This amounts to an approximate annualised pre-tax profit impact of Rs 160 crore (7.8 per cent of 2026–27 estimated/FY27E adjusted profit after tax).
"Our 2025–26E (FY26E)/FY27E ADPTV estimates of Rs 13,400 crore/Rs 15,300 crore are below the current market trend of FY26 to date ADPTV of Rs 15,500 crore.
"Hence, even if we factor in the impact, our estimates will not change significantly,” said analyst Madhukar Ladha of Nuvama Research.
Ladha expects BSE to lose 200–300 basis points (bps) in index option market share.
Analysts also noted that BSE’s market share declined 500 bps week-on-week in the second week of June.
BSE’s premium average daily turnover was around Rs 10,500 crore in the second week, down 39 per cent week-on-week and 33 per cent lower than the average of April and May.
The decline was attributed to lower volatility during the week.
While in the first quarter of FY26, the average daily premium turnover rose 30 per cent quarter-on-quarter, for June, it has averaged around Rs 13,800 crore.
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