SEBI Introduces New F&O Expiry Rules: Derivatives Must Expire Only on Tuesday or Thursday

The Securities and Exchange Board of India (SEBI) has announced significant regulatory changes for equity derivatives trading, introducing new restrictions on contract expiry days. The market regulator has mandated that all equity derivatives contracts must now expire exclusively on either Tuesday or Thursday, marking a substantial shift from the current flexible system.

This regulatory change aims to enhance market stability and reduce concentration risks associated with multiple expiry dates occurring simultaneously across different exchanges.

New Framework for Weekly Expiry Contracts

Under the revised regulations, each stock exchange will be permitted to select one specific day - either Tuesday or Thursday - for the weekly expiry of its benchmark index options contracts. This standardization represents a departure from the previous system where exchanges had complete autonomy in choosing their expiry schedules.

The regulator has established clear guidelines requiring exchanges to obtain prior approval from SEBI before implementing any changes to their chosen expiry day. This approval mechanism ensures regulatory oversight and prevents arbitrary modifications that could disrupt market dynamics.

Stock exchanges have been given a deadline of June 15, 2025 to submit their proposals regarding their preferred expiry day preference to SEBI for consideration and approval.

Comprehensive Coverage of Derivatives Products

The new regulations extend beyond weekly index options to encompass various categories of equity derivatives:

• Single stock futures and options: Must have minimum one-month duration
• Non-benchmark index derivatives: Required to maintain at least one-month expiry cycles
• Benchmark index futures: Subject to monthly expiry requirements

All these derivative products will now expire during the last week of each month, specifically on the exchange's designated day (Tuesday or Thursday). This standardization creates a more predictable and organized expiry schedule across the derivatives market.

Regulatory Background and Market Consultation

SEBI's decision follows an extensive consultation process that began with the release of a consultation paper in March 2025. The regulator subsequently engaged with its Secondary Market Advisory Committee to review feedback and finalize the regulatory framework.

This consultative approach demonstrates SEBI's commitment to incorporating market participant views while addressing systemic concerns related to derivatives trading patterns and market stability.

Addressing Market Concentration Risks

The primary motivation behind these regulatory changes centers on reducing concentration risks and preventing excessive trading activity that could destabilize the market. SEBI has identified several key concerns with the current system:

The regulator aims to eliminate trading spikes that occur around multiple expiry dates, which can create volatility and potentially harm investor interests. By standardizing expiry days, SEBI expects to achieve more balanced trading patterns throughout the week.

The new framework also seeks to prevent a return to excessive expiry-day activity that has historically created market disruptions and posed risks to retail and institutional investors alike.

Implementation Timeline and Exchange Requirements

SEBI has directed stock exchanges and clearing corporations to implement the necessary rule changes and system updates to accommodate the new expiry framework. This includes:

• Updating trading systems to reflect new expiry schedules
• Modifying risk management protocols for concentrated expiry days
• Adjusting settlement procedures to handle the standardized expiry pattern
• Implementing compliance mechanisms to ensure adherence to the new regulations

The regulatory changes will require significant coordination between exchanges, clearing corporations, and market participants to ensure smooth implementation without disrupting existing trading strategies.

Impact on Trading Strategies and Market Participants

The standardization of expiry days will likely impact various categories of market participants differently. Options traders who rely on weekly expiry strategies will need to adjust their approaches to align with the new Tuesday-Thursday framework.

Institutional investors and algorithmic trading systems will require modifications to accommodate the concentrated expiry schedule. The changes may also influence intraday volatility patterns as trading activity becomes more concentrated on specific days of the week.

Retail investors engaged in derivatives trading will benefit from reduced complexity in tracking multiple expiry dates across different exchanges, potentially making derivatives markets more accessible and easier to navigate.

Long-term Market Stability Objectives

SEBI's regulatory intervention reflects broader objectives of enhancing market integrity and protecting investor interests. By standardizing expiry schedules, the regulator aims to create a more predictable trading environment that reduces systemic risks associated with concentrated derivatives activity.

The changes align with SEBI's ongoing efforts to strengthen India's derivatives markets while maintaining their growth trajectory. The standardized approach should facilitate better risk management by market participants and regulatory authorities alike.

As exchanges prepare to submit their expiry day preferences by the June 15 deadline, market participants will be closely monitoring the implementation process and its potential impact on trading volumes, volatility patterns, and overall market dynamics in India's derivatives segment.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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TCS Restructures AI.Cloud Business into Separate Units to Accelerate Growth in Emerging Technologies

Tata Consultancy Services (TCS), India's largest information technology services provider by market capitalization, has announced a strategic restructuring of its AI.Cloud division. The company is splitting this integrated unit into two distinct business segments to capitalize on the rapidly expanding artificial intelligence and cloud computing markets.

This organizational shift represents a significant strategic move for TCS as the technology giant seeks to maximize growth opportunities in two of the most promising areas of the digital transformation landscape.

Strategic Reorganization for Enhanced Market Focus

The restructuring involves creating separate dedicated units for artificial intelligence and cloud services, moving away from the combined AI.Cloud model that TCS had established in August 2023. This original unit was designed to unlock greater business value by integrating cloud computing capabilities with generative artificial intelligence technologies.

Company executives emphasized that both AI and cloud computing represent substantial growth prospects with largely untapped market potential, providing strong justification for establishing distinct business units focused on each technology domain.

New Leadership Structure and Responsibilities

The restructuring brings significant leadership changes across the newly formed divisions:

• Siva Ganesan will continue leading the reformed AI.Cloud unit with expanded responsibilities
• Krishna Mohan, previously deputy head of the combined unit, has been promoted to lead the dedicated cloud division
• Ashok Krish has been appointed as the global head of AI operations
• Satish Byravan will serve as the global head of Data services

This leadership structure reflects TCS's commitment to having specialized expertise drive each technology vertical while maintaining coordination between related services.

Market Dynamics Driving the Split

Senior TCS executive Siva Ganesan highlighted the growing market momentum, stating that artificial intelligence is becoming increasingly pervasive and featuring prominently in business discussions across industries. He noted that this trend is expected to intensify significantly in the coming months and years.

The volume and intensity of activity in the AI and data services sector have grown exponentially over the past 12 months, according to company leaders. While TCS does not report separate revenue figures for its AI business segment, executives indicate robust demand growth across both enterprise and commercial clients.

Comprehensive AI and Data Integration Strategy

The newly structured AI unit will function as a central repository for all artificial intelligence initiatives within TCS. This centralized approach enables the company to maintain consistency in AI service delivery while building specialized capabilities across different industry verticals.

The integration of data services within the AI unit reflects the interconnected nature of these technologies. Many client organizations require comprehensive data infrastructure preparation before implementing AI solutions effectively. TCS can now offer integrated services that address both data readiness and AI implementation simultaneously.

This approach is particularly valuable for clients whose existing data infrastructure may not be immediately compatible with advanced AI applications, requiring foundational work before deploying artificial intelligence solutions.

Talent Acquisition and Capability Development

TCS is pursuing a dual approach to building its AI and cloud expertise. The company is actively recruiting AI specialists from the external market while simultaneously enhancing internal capabilities through updated training programs for existing employees.

This strategy allows TCS to rapidly scale its AI competencies while ensuring that current staff members can contribute effectively to the company's artificial intelligence initiatives. The internal training programs are being redesigned to reflect the latest developments in AI technology and industry best practices.

Strategic Positioning in Growing Markets

The restructuring positions TCS to better compete in two of the fastest-growing segments of the technology services market. Cloud computing continues to experience strong demand as organizations accelerate digital transformation initiatives, while artificial intelligence represents an emerging market with significant long-term growth potential.

By creating separate business units, TCS can develop specialized go-to-market strategies for each technology area while maintaining the ability to offer integrated solutions when clients require combined AI and cloud capabilities.

Future Growth Prospects

The strategic reorganization reflects TCS's confidence in the long-term growth potential of both artificial intelligence and cloud computing services. Industry analysts expect continued strong demand for cloud migration services, hybrid cloud solutions, and AI implementation support across multiple industry sectors.

The separation allows each unit to focus on developing specialized capabilities, building dedicated client relationships, and creating technology partnerships specific to their respective domains. This focused approach should enable TCS to capture a larger share of the growing market opportunities in both sectors.

The restructuring demonstrates TCS's proactive approach to organizational design, ensuring that the company's structure aligns with market dynamics and growth opportunities. As artificial intelligence and cloud computing continue to evolve rapidly, this strategic positioning should enable TCS to maintain its leadership position in India's technology services sector while expanding its global market presence.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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