The market regulator has proposed to limit the termination of derived contracts on Tuesday or Thursday, a step that can disturb the National Stock Exchange (NSE) scheme on Monday to transfer the last day for its weekly index option.
The proposed step is aimed at on Thursday, according to a consultation paper issued by the Securities and Exchange Board (SEBI), to reduce the concentration risk and allow product discrimination. Paper wants to formalize final settlement days for contracts derived in exchanges and avoid any improper reshuffle.
Paper said, “Each exchange will be allowed a weekly benchmark index option contract on their chosen days (Tuesday or Thursday).”
Currently, after a spherical of October 1, BSE Limited and NSE nominated on Tuesdays and Thursdays respectively, as the end days for single stock and index option contracts.
However, after the NSE, recently changed its weekly ends from Monday 4 April, SEBI concluded that due to several days of such days, the day -to -day contracts have the ability to revive hypercracity when mature.
SEBI also clarified that exchanges should now take approval from the regulator before launching or modifying any contract expiration or disposal day.
The regulator also proposed that the benchmark index futures, non-Benchmark index futures/options and single stock futures/options including other equity derivative contracts will be offered with a one-month minimal tanner. These contracts will end in the last week of the month on the specified Tuesday or Thursday of the exchange.
On March 19, Mint reported that the market regulator may review a controversial resolution for all customers in index options after receiving feedback against such rules from many market participants, a person knows.
