BSE Gets SEBI Nod For Sensex Next 30 F&O Contracts

Shares of Bombay Stock Exchange (BSE) Ltd moved higher on 5 March after the exchange received approval from the Securities and Exchange Board of India (SEBI) to introduce derivatives contracts linked to the BSE Sensex Next 30 index.

The announcement gives the exchange an additional derivatives product linked to a broader set of large companies beyond the benchmark Sensex. On Thursday, BSE shares were up 3.75% at around ₹2,725.50 apiece around early noon.

The proposed contracts will include cash-settled monthly index futures and monthly index options. Expiry for these contracts will fall on the last Thursday of the expiry month. The exchange has not yet announced the exact launch date.

In order to increase participation and provide more hedging tools, exchanges are expanding their derivatives offerings.

What Is the Sensex Next 30 Index?

The Sensex Next 30 index keeps an eye on the next set of significant, liquid companies in the BSE ecosystem that are close to the benchmark Sensex.

Specifically, companies included in the index are as follows:

• Belong to the larger BSE 100 segment.

• Are found in the section on derivatives.

• Are not included in the 30-stock Sensex

To put it simply, the index shows the next tier of major corporations that might potentially enter the benchmark index if market capitalisation and liquidity increase.

With derivatives contracts linked to this index, market participants will gain a way to take positions or hedge exposure related to these companies collectively rather than trading them individually.

BSE said the contracts will be cash settled, meaning the final settlement will take place in cash rather than through delivery of underlying shares.

The expiry schedule will follow the familiar derivatives structure in India’s market, where contracts expire on the last Thursday of the expiry month.

How Does This Fit Into BSE’s Existing Derivatives Offering?

BSE already runs several derivative products linked to its key indices. The addition of the Sensex Next 30 expands that lineup further.

Currently, the exchange offers derivative contracts for the following:

1. Sensex, with both weekly and monthly expiry cycles

2. Sensex 50, with monthly expiry

3. BANKEX, the banking sector index, also with monthly expiry

Last year, the exchange had also shifted the expiry day for its derivatives contracts from Tuesday to Thursday, aligning with a revised expiry structure in the broader derivatives market.

Apart from equity derivatives, BSE has also been expanding its index ecosystem. Recently, its subsidiary BSE Index Services introduced two government securities indices:

• BSE 4–8 Year G-Sec Index

• BSE 8–13 Year G-Sec Index

These indices are reconstituted monthly and track the performance of the three most liquid government securities within the respective maturity ranges. They can be used as benchmarks for strategies such as exchange-traded funds, index funds and portfolio management services.

Such developments show the exchange’s attempt to broaden the range of financial products linked to its indices.

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Why Are BSE Shares In Focus?

The new futures contracts have received regulatory clearance at a time when BSE shares have experienced significant advances in recent years.

The stock has risen:

• More than 81% in the past year

• Over 250% in the past two years

• Nearly 1,600% over past three years

Investors also continue to track developments in the derivatives segment closely, as activity in this space can influence trading volumes on an exchange.

Separately, BSE has also been adjusting its derivatives segment.

The exchange recently informed members that certain stocks, including Housing & Urban Development Corp., Piramal Pharma, Tata Technologies and Torrent Power, will be removed from the equity derivatives segment. Existing contracts will remain available until expiry, but no new contract months will be created beyond May 2026.

Such periodic adjustments are common as exchanges align derivatives eligibility with liquidity and regulatory requirements.

For now, the SEBI approval to launch Sensex Next 30 derivatives adds another product to BSE’s derivatives basket. Market participants will be watching when the exchange announces the formal launch timeline and how trading interest develops once the contracts become available.

Sources:

Moneycontrol

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