The National Stock Exchange (NSE) has withdrawn its plan to shift the expiry day for Future & Options (F&O) contracts of Nifty Bank from Thursday to Friday. Earlier this month, the NSE had announced that the first Friday expiry would take place on July 14, but it has since reversed course.
The decision came after rival exchange BSE requested that the NSE consider shifting the Nifty Bank expiry to any other day apart from Friday to ensure balanced market development. The NSE has now scrapped the plan entirely.
The move had initially been made to align the Nifty Bank expiry day with the expiry day of other F&O contracts, which are already set for Friday. This change would have allowed for a smoother settlement process of derivative contracts. However, the NSE appears to have made a decision to prioritize balanced market development.
The decision will likely have an impact on traders who had positioned themselves for the Friday expiry. Nevertheless, it is in keeping with the NSE’s remit to ensure balanced and orderly markets for investors.
It remains to be seen whether the NSE will propose any alternative options or whether it plans to revert to the previous arrangements. For now, traders may have to adjust their strategies accordingly.
The decision also highlights the importance of considering the opinions of stakeholders when making significant changes that affect the wider market. The NSE’s willingness to rescind its decision in response to feedback from the BSE is a welcome indication of its commitment to transparency and constructive dialogue.
The NSE will need to consider all options and consult with all relevant parties before making any future decisions on the matter. Nonetheless, the decision to withdraw the plan to shift the expiry day for Nifty Bank derivative contracts to Friday is a step towards balanced market development and is likely to be broadly welcomed by investors.
