BSE to stop weekly index derivatives on Sensex, Bankex

Leading stock exchange BSE on Thursday announced the discontinuation of weekly index derivatives contracts on Sensex 50 and Bankex, following a new directive from markets regulator Sebi. In its circular, BSE said weekly index derivatives contracts on the Sensex 50 will be discontinued from November 14 after the expiry of existing contracts. No new weekly contracts will be generated.

In addition, weekly index derivatives contracts on Bankex will be discontinued from November 18 with no new contracts created after the current ones expire. Existing unexpired contracts will continue until their scheduled expiry dates.

The move comes after the Securities and Exchange Board of India (Sebi) on Tuesday tightened the framework for equity index derivatives to curb speculative trading.

Under this, exchanges can offer weekly expiry derivatives only for one benchmark index to curb speculative trading.

Apart from this, Sebi announced five more measures — increasing minimum contract size and requiring upfront collection of option premiums, intra-day monitoring of position limits, removal of calendar spread benefit on expiry day, rationalisation of weekly index derivatives and increased tail risk coverage.