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SEBI overhauls derivatives rules to cut exchange compliance and delete outdated requirements
Economy
Published on 14 May 2026
SEBI wants to scrap the Close to the Money option
SEBI has launched a consultation proposing a broad overhaul of exchange-traded derivatives rules to reduce compliance load on stock exchanges and clearing corporations. In a May 14 paper, the regulator plans to simplify master circulars, remove redundant provisions, and streamline operational requirements across equity, currency, commodity and interest rate derivatives. Key ideas include deleting the commodity CTM option series, cutting mandatory Product Advisory Committee meetings, and letting exchanges advance contract expiries during disruptions with “adequate notice” instead of a fixed 10-day timeline.
- SEBI’s consultation targets simpler derivatives compliance for exchanges
- It proposes consolidating master circulars and removing duplication across segments
- The “Close to the Money” CTM option series mechanism may be removed
- Product Advisory Committee meetings for non-agri commodities may drop to once yearly
- Exchanges could advance expiry dates with MD approval and “adequate notice”
- Position limit monitoring could be outsourced to clearing corporations via agreements
Read the full story at The Economic Times
This summarization was done by Beige for a story published on 
The Economic Times