'In the interest of market development': NSE withdraws circular shifting Bank Nifty expiry to Friday

National Stock Exchange (NSE) on Tuesday withdrew its notification shifting Bank Nifty expiry to Friday from Thursday. 

Earlier this month, had changed the expiry for Bank Nifty Futures and Options (F&O) to Friday instead of Thursday, effective July 7, 2023. The first Friday expiry was scheduled for July 14.

NSE’s move would have been a blow to BSE’s recently launched weekly options contracts in the Sensex and Bankex contracts, which have a Friday expiry. 

Considering the need for "balanced market development and avoidance of concentration risk in the market", BSE has requested NSE to consider shifting of the Bank Nifty expiry to any day other than Friday.

"The proposed Friday expiry of Bank Nifty coincides with the expiry of the Sensex/ Bankex F&O contracts that were relaunched by BSE with effect from May 15, 2023. BSE, based on market feedback feels that this can potentially impact the growth of Sensex/Bankex derivatives. Considering the need for balanced market development and avoidance of concentration risk in the market, BSE has requested NSE to consider shifting of the Bank Nifty expiry to any day other than Friday. This will help in growing this complementing Sensex/Bankex derivatives and thus de-risk the market," said the stock exchanges in a joint press release. 

"Based on this, NSE, in the interest of market development has decided to withdraw the Circular Ref. No: 88/2023 with immediate effect. Members are hereby advised to note the following revision. Any further change will be duly notified by NSE," the exchanges added.

In March, NSE announced reduction in Bank Nifty's lot size to 15 from 25 from July 2023 monthly expiry. However, NSE left other market lots of derivatives contracts on indices unchanged, namely Nifty 50, Nifty Financial Services and Nifty Midcap Select, at 50, 45 and 75, respectively.