SEBI starts consultation on weekly F&O contracts, longer tenures: CNBC Awaaz sources

The Securities and Exchange Board of India (SEBI) has initiated consultations on the future of weekly derivative contracts, according to CNBC Awaaz sources.

The market regulator has engaged with large brokerage firms, seeking written suggestions on the possible transition and the introduction of longer-term contracts, people close to the matter added.

The process had first been mentioned by SEBI Chairman

Tuhin Kanta Pandey on August 21, when he indicated that the regulator was examining options for longer-tenure derivative products.

Earlier, on September 11, CNBC-TV18 reported that SEBI was likely to issue a consultation paper within a month to consider discontinuing weekly futures and options (F&O) contracts. Sources had told CNBC-TV18 that the regulator was weighing a move towards monthly expiries, with a clearly defined glide path.

Sources also

said SEBI may explore same-day expiries across exchanges, after NSE shifted its weekly contracts to Tuesday while BSE moved to Thursday.

The upcoming consultation paper could also propose measures to curb retail participation in F&O trading, such as thresholds for participation — rules that would be practical, enforceable, and difficult to evade.

Additionally, SEBI is expected to consider steps to boost cash market volumes, balancing any impact from reduced retail activity in derivatives. Stock exchanges like BSE and NSE are likely to be drawn into discussions soon, sources added.

SEBI has not officially responded to media queries so far, but a consultation paper seeking stakeholder feedback is expected to be released in the coming weeks.