BSE Ltd. Shares Decline Amid SEBI’s New F&O Expiry Directive

On May 27, 2025, shares of BSE Ltd. experienced a nearly 2% drop following a directive from the Securities and Exchange Board of India (SEBI). The regulator mandated that exchanges must choose either Tuesday or Thursday for the expiry of Futures & Options (F&O) contracts. This decision impacts the trading dynamics, as each exchange is permitted one weekly benchmark index options contract on their selected day, with all other equity derivatives contracts expiring in the last week of each month on the chosen day. SEBI has set a deadline of June 15, 2025, for exchanges to submit their proposals regarding the selection of the expiry day.

At 3:05 pm on May 27, BSE shares were trading 1.8% lower at Rs 2,406 on the National Stock Exchange (NSE). The stock’s 52-week high stands at Rs 2,529, while its 52-week low is Rs 705. It is important to note that the BSE share price has been adjusted for a 2:1 bonus issue that was implemented the previous week. Despite the decline, global brokerage firm Goldman Sachs maintained a ‘Neutral’ rating on BSE, anticipating that the NSE might opt for Tuesday as its expiry day.

NSE’s Strategic Move to Tuesday Expiry

In a related development, the National Stock Exchange of India Ltd. (NSE) is planning to apply for a change in its derivatives contracts expiry date from Thursday to Tuesday. This move is aimed at intensifying competition with its rival, BSE Ltd., which currently uses Tuesday for its expiry. The NSE, which handles the highest number of derivatives contracts globally, is expected to submit its application for all weekly and monthly contracts as early as Tuesday. This strategic shift aligns with SEBI’s recent directive to limit expiry days to Tuesday or Thursday, aiming to curb excessive trading and enhance market stability.

Market Reactions and Broader Implications

The directive from SEBI and the subsequent strategic moves by major exchanges like NSE and BSE are likely to have significant implications for market dynamics. Investors and market participants are closely monitoring these developments, as they could influence trading volumes and market liquidity. The decision by NSE to potentially shift its expiry day to Tuesday could lead to increased competition between the two leading exchanges, impacting their market share and operational strategies.

Global Context: NSE’s Valuation Surge

In a broader financial context, the National Stock Exchange of India Ltd. has seen its valuation surge by 60% in private markets, reaching US$58 billion. This increase is driven by growing anticipation of an initial public offering (IPO) and aggressive buying by wealthy investors and institutions. The potential IPO, which could place NSE’s valuation above that of Nasdaq Inc., is contingent on resolving a longstanding legal dispute with India’s securities regulator. This development underscores the dynamic nature of the Indian capital markets and the strategic positioning of its major exchanges.

Conclusion

The recent developments involving SEBI’s directive and the strategic responses by BSE Ltd. and NSE highlight the evolving landscape of India’s capital markets. As exchanges navigate these regulatory changes, the impact on trading practices, market stability, and investor confidence will be closely watched by stakeholders across the financial ecosystem.