BSE Jumps 17% as NSE Delays Monday Expiry Amid SEBI Consultation

BSE Stock Rebounds as NSE Maintains Status Quo on Expiry Days

Shares of BSE Ltd., Asia’s oldest stock exchange, soared 17% on March 28 after its competitor, National Stock Exchange (NSE), decided to defer its plan to shift derivatives expiry days to Monday.

This sharp rally in BSE’s stock price, which was trading at ₹5,494 per share at 10:50 AM, came after the Securities and Exchange Board of India (SEBI) released a consultation paper proposing a uniform expiry day framework across exchanges. SEBI suggested that all equity derivatives contracts should have expiry days limited to either Tuesday or Thursday to ensure better market efficiency.

• BSE shares surged 17% following NSE’s decision to defer Monday expiry changes.

• SEBI’s proposal recommends expiry days to be either Tuesday or Thursday.

• Stock trading at ₹5,494 per share, recovering from previous declines.

SEBI’s Consultation Paper Puts NSE’s Expiry Plans on Hold

According to sources, SEBI has advised stock exchanges not to proceed with any changes to derivatives expiry days until further clarity is provided. NSE had earlier announced that it would shift its weekly, monthly, and quarterly derivatives expiry from Thursday to Monday, a move that had triggered a sharp selloff in BSE’s stock.

Following SEBI’s intervention, NSE is expected to issue a circular confirming that it will maintain the status quo for now. The regulator has also proposed that exchanges must seek prior approval before modifying contract expiry dates to avoid market disruptions.

• SEBI has directed exchanges to maintain current expiry schedules.

• NSE may soon confirm in an official circular that no changes will be made.

• Exchanges will now require regulatory approval before modifying expiry schedules.

Market Reaction: BSE Rebounds After Earlier Selloff

The stock price movement of BSE Ltd. over the past few days has been highly volatile, largely influenced by the expiry schedule changes. When NSE initially announced its move to shift expiry days to Monday, BSE’s shares tumbled by 9% due to concerns over reduced trading volumes and liquidity on its platform.

Market participants believed that a shift in NSE’s expiry days would significantly impact BSE, as its Sensex-based derivatives currently expire on Tuesdays. The fear was that traders would gravitate towards NSE’s new expiry day, further eroding BSE’s market share in the futures and options (F&O) segment.

However, with SEBI stepping in and NSE deferring its plans, BSE has managed to recoup most of its recent losses, bringing some relief to investors.

• BSE shares had earlier fallen 9% due to concerns over declining liquidity.

• Traders feared NSE’s Monday expiry could hurt BSE’s derivative segment.

• With SEBI’s intervention, BSE has reversed most of its losses.

Brokerage Firms Weigh In on the Impact

The development has also prompted brokerage firms to reassess the impact of NSE’s proposed changes on BSE’s business model.

According to Jefferies, the initial concern was that BSE could lose market share, which would result in a 12% earnings per share (EPS) impact. However, with SEBI pushing for a more balanced expiry day distribution, the brokerage believes that BSE’s downside risks are now significantly lower.

Jefferies further noted that while clarity on open interest limits is still awaited, maintaining the current Tuesday and Thursday expiry framework could prevent a major disruption in trading patterns.

Meanwhile, Nuvama Research had earlier warned that NSE’s move to shift expiry days to Monday could hurt overall industry trading volumes, particularly impacting retail traders who rely on multiple trading avenues. With NSE now deferring its decision, some of these concerns have been alleviated.

• Jefferies: BSE’s market share loss concerns have eased.

• Jefferies: 12% EPS impact previously estimated may not materialize.

• Nuvama Research: Industry trading volumes would have been affected by NSE’s Monday expiry.

What’s Next for BSE and NSE?

With SEBI taking a proactive role in regulating derivatives expiry schedules, market analysts expect further discussions on how to best distribute expiry dates across exchanges to avoid excessive concentration of liquidity on any single platform.

For now, the regulator’s stance provides a temporary relief for BSE, which had faced significant uncertainty over its F&O segment’s future. If NSE reverts to its Thursday expiry schedule, while BSE continues with its Tuesday expiries, the market could see a more balanced distribution of trading activity.

As the situation continues to develop, investors will be watching closely for further regulatory announcements and potential shifts in trading behavior across India’s two largest stock exchanges.