The Bombay Stock Exchange (BSE) will retain weekly derivative contracts linked to the Sensex index after the Securities and Exchange Board of India (SEBI) introduced stricter rules for equity derivatives, according to sources. SEBI’s new regulations, effective from November 20, will limit exchanges to offer only one weekly options contract.
This is in response to a surging number of retail investors trading options, which regulator SEBI and the government see as a risk to household finances. Indeed, a study by SEBI found that 92.8% of individual traders faced net losses of Rs 1.81 trillion in futures and options over the past three years.
The BSE presently operates two index contracts — BSE Sensex and BSE Bankex. Since the volumes are more in the Sensex contract, the weekly expiries will continue there. In August, the Sensex contributed 85% to total volumes at BSE. After SEBI final rules relaxed expiry-day margin requirements, shares of BSE surged over 8%.
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Source: ET
News Desk
