Could a well-meaning regulatory push end up distorting the very markets it’s designed to protect? That’s the question raised by the Securities and Exchange Board of India’s new proposal to impose uniform expiry days for equity derivatives. The plan, as outlined in SEBI’s consultation paper, would confine weekly and monthly expiries to either Tuesday or Thursday across all stock exchanges.This SEBI consultation paper has come on the heels of a circular issued by the National Stock Exchange of India, on March 4, changing their derivatives expiry day from Thursday to Monday. At first glance, the proposed move appears like a good solution for reining in excessive volatility and safeguarding smaller investors. But beneath the surface, this “one-size-fits-all” fix might inadvertently bring fresh turbulence to India’s derivatives market.
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