CIRCULAR
SEBI/HO/MRD/MRD-TPD-1/P/CIR/2025/76 May 26, 2025
To,
All Recognised Stock Exchanges
All Clearing Corporations
Sir / Madam,
Subject: Final Settlement Day (Expiry Day) for Equity Derivatives Contracts
1. The Securities and Exchange Board of India Act, 1992 (“SEBI Act”) mandates SEBI
to protect the interest of investors in securities and to promote the development of,
and to regulate the securities market, by such measures as it thinks fit. One of the
measures to achieve the aforesaid objective is through regulating the business in
the stock exchanges.
2. Under the extant Regulatory provisions, stock exchanges can decide upon the
expiry day of their derivatives products. In the multi exchange framework, spacing
out of expiry days through the week reduces concentration risk and provides an
opportunity to stock exchanges to offer product differentiation to market
participants. At the same time, too many expiry days has the potential to revive
expiry day hyperactivity which could jeopardize investor protection and market
stability. Against the aforesaid backdrop, a consultation paper was issued by SEBI
on March 27, 2025, in the matter. The comments received were examined by SEBI,
and the matter was further deliberated in Secondary Market Advisory Committee
(SMAC) of SEBI.
3. Based on the aforesaid and in exercise of powers conferred under Section 11 (1)
read with Section 11(2)(a) of the SEBI Act, 1992, to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market, following has been decided with regard to final settlement day /
expiry day for equity derivatives contracts:
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3.1. Expiries of all equity derivatives contracts of an exchange will be uniformly
limited to either Tuesday or Thursday.
3.2. Every exchange will continue to be allowed one weekly benchmark index
options contract on their chosen day (Tuesday or Thursday).
3.3. Besides benchmark index options contracts, all other equity derivatives
contracts, viz., all benchmark index futures contracts, non-benchmark index
futures / options contracts, and all single stock futures / options contracts will
be offered with a minimum tenor of 1 month, and the expiry will be in the last
week of every month on their chosen day (that is last Tuesday or last Thursday
of the month).
3.4. Exchanges will now seek prior approval of SEBI for modifying the settlement
day of their derivatives contracts from the one which has been existing.
4. To operationalize the aforesaid circular, stock exchanges shall submit their
proposal to SEBI, in compliance with Clause 3 above, by June 15, 2025.
5. Stock Exchanges and Clearing Corporations are directed to take necessary steps
to put in place systems for implementation of this Circular, including necessary
amendments to the relevant bye-laws, rules and regulations, if any.
6. This circular is available on SEBI website at www.sebi.gov.in under the category
“Legal → Circulars”.
Yours faithfully,
Ansuman Dev Pradhan
General Manager
Technology, Process Re-engineering, Data Analytics
Market Regulation Department
Phone no. +91-22-26449622
Email: ansumanp@sebi.gov.in
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