In feedback to the regulator, industry and broker associations said the move could unintentionally spike market volatility and stifle product innovation by limiting exchanges’ ability to design investor-focused offerings.
In a letter to Sebi, the IMC Chamber of Commerce and Industry argued that expiry concentration should not be mistaken for risk.
“The real challenge lies in managing expiry-day exposures and monitoring investor behaviour, not the day the contract expires,” the association said.
It added that clustering expiries on one or two days creates uneven open interest distribution-leading to sharp peaks on expiry days and troughs on others-placing additional stress on clearing corporations.
On Sebi’s plan to allow only one weekly benchmark index options contract per exchange, IMC suggested a more balanced approach, permitting multiple weekly contracts, provided they meet minimum thresholds for participation and liquidity, and don’t contribute to excessive intraday turnover by a narrow band of retail traders.On March 27, Sebi proposed that the weekly and monthly expiries of index and single-stock derivatives be restricted to either Tuesdays or Thursdays to safeguard market integrity. The regulator also suggested that exchanges must seek Sebi’s prior approval before introducing or altering any contract expiry or settlement dates. The deadline for submitting public comments on the consultation paper was April 17.
