Zee Biz Nov 14, 2009 Bourses Get Flexibility To Settle F&O
Bourses get flexibility to settle F&O
Saturday, November 14, 2009 (Mumbai)
Market regulator SEBI on Friday gave the stock exchanges flexibility to set the futures & options
settlement day, instead of the current practice of the last Thursday of the month.
Analysts said the move is an encouraging step for the bourses to come out with innovative timelines,
which would provide flexibility to investors.
"It has been decided to allow flexibility to the stock exchanges to set the expiry date/day for equity
derivative contracts," the SEBI said in release on Saturday.
The current practice is that open positions on futures and options of equities have to be settled on the last
Thursday of the month.
With SEBI's latest move, the stock exchanges can now fix the expiry date on any day of the month.
The regulator has also asked the bourses to ensure that there is no change in the contract specifications
or the risk management framework and the integrity of the market is not affected.
The current size of the F&O market is about 10 times of the cash market and the National Stock
Exchange, the pioneer in the segment in the country, enjoys virtual monopoly.
"The move follows requests from other bourses which want to have a slice of the F&O business through
launch of innovative products," SMC Capitals Equity Head Jagannadham Thunuguntla said.
The Bombay Stock Exchange has been demanding the expiry date on the penultimate Thursday of the
month and MCX-SX, too, has expressed interest for innovative timelines once it gets into the business, he