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The National Stock Exchange (NSE) has announced the discontinuation of weekly index derivatives contracts for Bank Nifty, Nifty Midcap Select, and Nifty Financial Services, effective from November 13th, 18th, and 19th, respectively. This decision follows new regulations outlined by the Securities and Exchange Board of India (SEBI), which aim to enhance market stability and protect investors.
Effective November 20th, SEBI's new guidelines mandate that exchanges limit weekly option expiries to only one index per exchange. Consequently, the NSE will retain only the Nifty 50 for weekly derivatives contracts. Additionally, SEBI has instructed exchanges to monitor intraday positions at least four times daily and enforce penalties for breaches, similar to the existing penalties at the end of the trading day.
The move to curtail index derivatives contracts stems from concerns regarding their speculative nature, particularly on contract expiry days. SEBI's series of measures, introduced on October 1st, aim to strengthen the index derivatives framework. In response, the Bombay Stock Exchange (BSE) announced on October 3rd that it will discontinue weekly index derivatives contracts for the SENSEX 50 from November 14th and for BANKEX from November 18th.