News

Published: June 28, 2023
Updated: June 28, 2023

NSE Reverses Decision to Shift Nifty Bank F&O Expiry to Friday

The National Stock Exchange (NSE) has decided to withdraw its plan to shift the expiry of Nifty Bank derivative contracts from Thursday to Friday, aligning with the Bombay Stock Exchange's (BSE) request. The initial decision by NSE was made in response to BSE's move to shift the expiry of Sensex and Bankex derivative contracts to Friday. However, after considering market feedback and the potential impact on the growth of Sensex/Bankex derivatives, NSE has reversed its decision.

NSE Withdraws Proposal to Align with BSE:

In a joint statement, NSE and BSE acknowledged the importance of balanced market development and the need to avoid concentration risk. BSE expressed concerns that NSE's decision could have adverse effects on the growth of Sensex and Bankex derivatives. Therefore, BSE requested NSE to consider shifting the Bank Nifty expiry to a different day other than Friday.

NSE's Decision to Foster Market Development:

To promote market development and address the concerns raised by BSE, the NSE has decided to withdraw its proposal with immediate effect. This move aims to ensure a fair and balanced approach to the market and mitigate any potential risks associated with concentration.

Benefits of Shifting Nifty Bank Expiry:

BSE believed that moving the expiry of Nifty Bank derivative contracts to a day other than Friday would encourage greater participation in Sensex and Bankex derivatives. The shift was expected to bring about increased market activity and improve risk management within the derivatives market.

Reversal of Earlier Decision:

Earlier this month, NSE had announced its plan to shift the expiry of Nifty Bank derivative contracts to Friday from Thursday, following BSE's similar move for Sensex and Bankex indices. However, after careful consideration and consultation with market participants, NSE has decided to reverse its decision and maintain the current expiry schedule.

The NSE's decision to withdraw its proposal to shift the expiry of Nifty Bank derivative contracts to Friday demonstrates its commitment to maintaining a balanced and stable market environment. By addressing the concerns raised by BSE and fostering market development, NSE aims to ensure a fair and efficient trading ecosystem. This reversal emphasises the importance of collaboration and market feedback in shaping the policies and decisions of stock exchanges for the benefit of all market participants.