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India’s securities market regulator on Wednesday said that there would be no further changes to the derivatives expiry day, ending speculation that the bourses may again seek a shift at some point.
“It’s settled now,” Securities and Exchange Board of India Chairman Tuhin Kanta Pandey told reporters at a briefing in Mumbai after the regulator’s board meet.
Shares of BSE Ltd. extended a five-day drop Wednesday after the exchange announced plans to switch its expiry day for equity derivatives contracts to Thursday, marking the latest shake-up in the world’s largest market for the contracts.
The stock tumbled as much as 6.2% before recovering most of its losses to close 1.2% lower in Mumbai trading. Brokerages warned of near-term earnings risk, with Jefferies Financial Group Inc. and Ambit Capital Pvt. flagging potential cuts to earnings per share estimates for Asia’s oldest stock exchange.
“This shift will lead to a loss in market share for BSE in terms of premium turnover”, which stood at 22.6% in May, said Prayesh Jain, analyst at Motilal Oswal Financial Services Ltd. Jain, who downgraded the stock to neutral from buy, cut earnings estimate for the bourse by 9% for financial year ending in March 2026.
BSE’s move is a response to larger rival National Stock Exchange of India Ltd. shifting its expiry day to Tuesday from Thursday, aiming to regain market share in index options. Both exchanges will implement the changes from Sept. 1, according to separate statements.
The move brings to an end months of back and forth between India’s two main exchanges over expiry dates, as both jostle to capture a bigger share of the derivatives market. The reshuffle adds to recent regulatory changes aimed at curbing excessive speculation among retail traders that have led to a drop in participation.
Ambit Capital said BSE’s market share in the index options could drop to 8% from 23% on Fridays due to NSE’s new expiry day. Traders may favor Nifty 50 options because of the early expiry, the brokerage said.
The BSE had gained significant ground in the segment over the past two years, captured more than 20% share, Goldman Sachs Group Inc. analysts including Gurpreet Singh Sahi wrote in a note earlier this week.
The NSE, the world’s top derivatives bourse, has been facing a steady decline in market share after the regulator’s crackdown on speculative bets.
In November, the exchange switched the expiry of several of its index derivatives to Thursday. It then unexpectedly said in March it would switch to Monday, a move aimed squarely at the BSE, whose contracts settled on Tuesday. The NSE quickly abandoned the idea after the SEBI pushed the bourses to stick to either Tuesday or Thursday.
–With assistance from Diksha Rajput and Santosh Nair.
(Updates to reflect closing stock price in fourth paragraph.)
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