SEBI Approves F&O Expiry Swap: NSE Moves to Tuesday, BSE to Thursday

In a significant regulatory realignment, the Securities and Exchange Board of India (SEBI) has approved the National Stock Exchange’s (NSE) proposal to move its weekly equity derivatives expiry to Tuesday. This prompts a corresponding shift of BSE’s Sensex derivatives expiry to Thursday, a decision that triggered a sharp sell-off in BSE Ltd. shares.

The Indian derivatives market is poised for a major overhaul. On Wednesday, June 18, 2025, SEBI approved a long-discussed proposal to reshuffle the expiry days for the country’s two largest stock exchanges. Effective September 1, 2025, all of NSE’s benchmark index derivatives, including the heavily traded Nifty 50 contracts, will expire on Tuesdays instead of their traditional Thursday slot.

To prevent a clash and streamline market operations, BSE will consequently move its weekly Sensex and Bankex derivatives expiry from Tuesday to Thursday. This decision, aimed at creating a more orderly and predictable Futures & Options (F&O) segment, had an immediate and pronounced impact on Dalal Street.

The Immediate Market Reaction

The market’s response was swift, particularly for BSE Ltd. The company’s stock, which trades on the NSE, plummeted as soon as the news was announced, falling over 6% to an intraday low of ₹2,500. Although the stock recovered slightly, the sentiment remained overwhelmingly negative. The previous day, BSE shares had closed at ₹2,660.

The broader market indices also felt the pressure, with the Sensex and Nifty closing in the red for the second consecutive day. The BSE Sensex settled 138.64 points (0.17%) lower at 81,444.66, while the NSE Nifty 50 ended 41.35 points (0.17%) down at 24,812.05. However, the spotlight was firmly on the exchange stocks as investors began to digest the long-term implications of this structural change.

A History of Strategic Reshuffling

This is not the first time the exchanges have adjusted their expiry days. The competition for dominance in the lucrative derivatives market has led to several changes over the past two years.

The trend began in May 2023 when BSE launched weekly contracts for its Sensex and Bankex indices with Friday expiries. This was followed by a series of strategic moves:

• September 2023: NSE moved its Bank Nifty expiry to Wednesday.
• October 2023: BSE shifted its Bankex expiry to Monday.
• January 2025: BSE moved its Sensex expiry to Tuesday.

This constant reshuffling led to a fragmented market with expiries scattered throughout the week. To restore stability, SEBI intervened in November 2024, introducing rules that restricted exchanges to offering weekly expiry on only one index and required regulatory approval for any changes. The latest decision is the culmination of this effort to create a more structured trading environment.

BSE’s Managing Director and CEO, Sundararaman Ramamurthy, stated that the move to Thursday was in the “overall interests of markets,” noting that Thursday aligns with global market practices and that most institutional investors have algorithms aligned with that day.

Analyst Insight: A Potential Blow to BSE’s Momentum?

The sharp negative reaction in BSE’s stock price reflects investor fears that this move could halt the exchange’s recent momentum in the derivatives space. BSE had been successfully gaining market share from the dominant NSE, particularly after shifting its expiry to Tuesday, a day with less competition.

Brokerage firm Motilal Oswal reportedly downgraded BSE’s stock from ‘Buy’ to ‘Neutral’ and slashed its target price to ₹2,300, implying a potential 14% downside from its previous close. The brokerage’s analysis highlighted that BSE’s market share in premium turnover had surged to 22.6% in May 2025. On its exclusive Tuesday expiry, its market share was as high as 38%.

With the shift to Thursday, BSE will now compete directly with the expiry of various other contracts and will be influenced by the Nifty’s historical expiry day. Motilal Oswal estimates this could lead to a 350-400 basis point loss in market share for BSE, potentially bringing it down to the 18-19% range.

What to Watch Next

The transition to the new expiry schedule will be gradual. Both exchanges have confirmed that existing contracts expiring on or before August 31, 2025, will adhere to the current schedule. The new Tuesday (for NSE) and Thursday (for BSE) expiries will apply to all contracts issued from September 1, 2025.

For investors and traders, the key factors to monitor are:

• Volume and Open Interest Shifts: Closely track how trading volumes and open interest in Sensex and Nifty contracts evolve after September 1. This will be the clearest indicator of the market share dynamics.
• Volatility Patterns: The concentration of expiries on Tuesday and Thursday could create new weekly volatility patterns. Traders will need to adapt their strategies accordingly.
• BSE’s Counter-Moves: BSE has been innovative in its efforts to gain market share. Watch for new products, incentive schemes, or technological upgrades the exchange might introduce to counter the perceived disadvantage.
• Further Analysis: Keep an eye on additional brokerage reports for deeper insights into the financial impact on both exchanges.

This strategic realignment by SEBI is a pivotal moment for India’s capital markets. While the primary goal is a more stable and less speculative derivatives environment, an unintended consequence might be the re-consolidation of market share with the NSE, potentially undoing some of BSE’s hard-won gains. The coming months will be crucial in determining the new equilibrium on Dalal Street.

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This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.