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BSE Monthly Derivatives on New Indices: Sebi Approval Sought

2 May 20251 min read
BANKING & FINANCEBSE MonthlyDerivatives onNew Indices: SebiApproval Sought2 May 2025safalsetu.com

Why in the news

In May 2025, BSE asked Sebi to let it list monthly derivatives on a few more indices, including thematic ones, to grow its F&O share.

Key facts

  • Existing monthly contracts: Sensex, Bankex and Sensex50.
  • New launches: 20 indices since September 2024, among them BSE 1000, BSE PSU Bank and BSE Focused IT.
  • Uses: mutual funds, PMS, ETFs and index funds.

Index options share

PeriodBSE share
Dec 202416.4%
Feb 2025About 22.1%

Sebi eligibility tests

  • Stocks forming 80% of index weight must be derivative-eligible.
  • A stock not eligible for F&O may carry at most 5% weight.

Concerns

  • Approval may take time as Sebi reworks F&O rules, such as delta calculation and a possible two-day expiry limit.

Exam angle

  • Key numbers: 80% weight test, 5% cap, 20 new indices.

Test yourself

1. Under Sebi's norms noted for BSE's proposal, stocks making up what share of an index's weight must be F&O-eligible?

The condition is 80% of index weight.

2. Which set lists the indices on which BSE already offers monthly derivative contracts?

Existing monthly contracts cover Sensex, Bankex and Sensex50.

3. BSE's share in index options was about what in February 2025?

It climbed from 16.4% to about 22.1%.