BSE Share Surges 16% Following New SEBI Regulations; NSE Postpones Derivative Expiry Change. Analysts anticipate increased market share and trading volume for BSE.
Sebi Rule: BSE's share price closed 16% higher on Friday, marking its largest single-day gain in the past six months. This surge is primarily attributed to a new proposal from the Securities and Exchange Board of India (SEBI). SEBI's recommendation to limit derivative expiry to only two days could significantly increase BSE's market participation.
NSE Reverses its Decision
Following SEBI's proposal, the National Stock Exchange of India (NSE) has temporarily shelved its plan to shift the expiry of index derivative contracts from Thursday to Monday. This change was scheduled to take effect from April 4th. This decision contributed to the strengthening of BSE shares, which closed at ₹5,438.
Market Analysts' Perspective
Analysts believe that NSE's decision will improve BSE's revenue projections. According to Amit Chandra, an analyst at HDFC Securities, BSE has gained significant market share in the derivatives segment over the past two months. Trading volume on BSE has naturally increased as many participants have prioritized Sensex-based contracts.
Surge in Market Share
According to an HDFC Securities report, BSE's market share has increased from 13% to 19% quarter-on-quarter, while option premiums have seen a 30% rise.
Broader Impact of SEBI's Proposal
On Thursday, SEBI issued directives requiring each exchange to limit its equity derivative expiry to either Tuesday or Thursday. Currently, BSE's single-stock and index derivative contracts expire on Tuesday, while on NSE they expire on Thursday. Exchanges will now require SEBI's approval for any changes.
Impact on Derivative Trading
SEBI's proposal considers the recent surge in derivative trading volume and the increasing risk in index options on expiry days. The increased number of expiry days was putting pressure on market infrastructure and brokering systems.
