The National Stock Exchange (NSE) announced it will discontinue weekly index derivatives contracts for Bank Nifty, Nifty Midcap Select, and Nifty Financial Services from November 13, 18, and 19, respectively, in compliance with new regulations issued by the Securities and Exchange Board of India (SEBI).
Under SEBI’s revised futures and options (F&O) rules, effective November 20, each exchange is allowed only one weekly index derivatives contract. Following this change, NSE will offer only the Nifty 50 as a weekly tradeable index.
On October 3, the Bombay Stock Exchange (BSE) said it would discontinue weekly derivatives contracts for the Sensex 50 and Bankex indices from November 14 and 18, with only the Sensex weekly derivatives contract remaining for trading.
The new SEBI guidelines also require exchanges to monitor intraday trading positions at least four times a day, imposing penalties for any breaches of intraday limits.
The size of derivatives contracts for benchmark indices such as Nifty and Sensex will increase, with the notional value rising from Rs 5 lakh-Rs 10 lakh to Rs 15 lakh-Rs 20 lakh.
SEBI tightened these F&O rules in response to significant losses incurred by retail investors in the derivatives segment. A recent SEBI study revealed that over the past three years, 1.10 crore traders in the F&O market suffered a combined loss of Rs 1.81 lakh crore, with only 7% of traders managing to turn a profit.
NSE data shows a surge in trading activity, with equity cash market turnover doubling between FY 2020 and FY 2024. Index options turnover grew 12-fold during the same period, rising from Rs 11 lakh crore in FY 2020 to Rs 138 lakh crore in FY 2024.
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