SEBI to float consultation paper to phase out weekly F&O contracts next month: Exclusive

Market regulator Securities and Exchange Board of India (SEBI) is likely to float a consultation paper within the next month, to consider ending the weekly F&O contracts, sources with knowledge of the matter told CNBC-TV18.

SEBI Chairman Tuhin Kanta Pandey on August 21, had first mentioned about the regulator exploring longer-tenor derivative products.

Sources said that SEBI is planning a transition to monthly expiries, with a defined glide path, adding that the regulator may consider the same day expiry across exchanges.

The regulator is also likely to consider a same day expiry across exchanges, according to sources, after the recent transition of NSE to Tuesday and BSE to Thursday expiries for their respective weekly contracts.

SEBI's board is likely to be briefed on the longer derivatives tenure at their upcoming board meeting on Friday, September 12 and consultation with the exchanges is likely to begin as early as next week, the sources added.

The consultation paper is likely to propose curbs to reduce retail participation in the F&O segments, by suggesting thresholds for the same, sources said. They added further that the steps to reduce retail F&O participation will be practical, enforceable, and difficult to evade.

Steps to boost cash market volumes could also be recommended within the consultation paper, sources added.

Shares of BSE dropped to the lowest point of the day, currently trading 3.5% lower at ₹2,188.6. Shares of Angel One fell as much as 5% and are currently trading 3.8% lower at ₹2,248.1.