Allow weekly options back on Bank Nifty: Brokers’ body

ANMI Seeks Relaunch of NSE Weekly Options Contracts on Bank Nifty

The Association of National Exchanges Members of India (ANMI) has written to the markets regulator, Sebi, urging it to allow the National Stock Exchange (NSE) to re-launch weekly options contracts on Bank Nifty.

Following a directive from Sebi in October 2024, the NSE discontinued Bank Nifty weekly options in November 2024, leading to a significant drop in volumes and revenues for the bourse. As a result, the industry has seen a loss of jobs at brokerages, while the government is losing revenues due to a drop in securities transaction tax (STT), goods & services tax (GST), and other related taxes.

Impact on Jobs and Revenue

• Jobs Loss: The discontinuation of weekly options contracts has led to a contraction in support roles, including dealers, sales-persons, and back-office staff, resulting in job losses in the industry.
• Revenue Loss: The reduction in trading volumes has resulted in a corresponding reduction in STT and GST on brokerage, adversely affecting government revenue from ancillary services linked to this trading.

Significance of Weekly Options Contracts

According to estimates, during the first half of FY25, premiums from weekly options on the Bank Nifty index constituted about 74% of the total premiums in Bank Nifty options, making them a significant contributor to trading volumes on the NSE.

ANMI has urged Sebi to reconsider its decision and allow the NSE to re-launch weekly options contracts on Bank Nifty, citing the negative impact on the industry and the government's revenue.