The Association of National Exchanges Members of India (ANMI), which represents around 800 brokers across Sebi-recognized exchanges such as the National Stock Exchange and BSE, said the Bank Nifty’s imminent reconstitution and its utility as a hedging tool make a case for restoration.

The appeal comes at a time when last year’s clampdown by Sebi on weekly expiries—after losses to over 90% of individual traders—has reduced index options turnover by 26% and raised concerns over liquidity in one of India’s busiest derivatives markets.

ANMI proposal

In a representation submitted to Sebi on Tuesday, ANMI president K. Suresh said weekly Bank Nifty options could be revived once “stronger safeguards” on margining, monitoring, and investor protection are implemented. The association also suggested wider consultation with brokers, dealers, and traders to assess operational and livelihood disruptions before any further reform is finalized.

The country’s largest equity stockbroker forum’s submission, a draft of which was reviewed by Mint, said that rather than outright discontinuation, additional weekly series might be reconsidered with “enhanced” regulatory oversight.

Queries to Sebi on ANMI’s representation went unanswered.

Alarmed by the huge losses faced by individual traders in weekly options—nearly 7.9 million of 8.63 million individuals had suffered losses, averaging ₹86,728 each—Sebi had in October last year directed exchanges to stop offering multiple weekly expiries such as Bank Nifty and Bankex, respectively, while permitting them to offer only Nifty and Sensex weekly option expiries.

Bank Nifty weekly options, which had around 55% market share in NSE’s bouquet of weekly options’ offerings, were discontinued from 13 November. Currently, Nifty options, expiring every Tuesday, and Sensex options with a Thursday expiry, are the only two weekly index options permitted by Sebi.

After the discontinuation of weekly Bank Nifty expiry, index options’ average daily premium turnover on NSE has fallen to ₹44,818 crore in April-October from ₹60,481 crore in the year-ago period.

Apart from restricting weekly expiries, Sebi last month mandated reconstitution of the Bank Nifty index to cap the weightages of the top constituents and thus remove the scope for manipulation of the index.

The new framework mandates that the index must comprise a minimum of 14 stocks, up from 12 currently, with the top constituent’s weight capped at 20% and the combined weight of the top three stocks limited to 45%. These measures will come into effect in four monthly tranches starting December.

As of October end, Bank Nifty’s top constituent was HDFC Bank, with a weight of 27.97%, above the stipulated 20%, which will have to be cut through four monthly tranches. The top three constituents (HDFC Bank, ICICI Bank and State Bank of India) have a combined weight of 60.3%, well in excess of the 45%, which will have to be reconstituted by the NSE, per exchange data.

The reconstitution of non-benchmark indices came on the heels of Sebi’s investigation into the trades of US high-frequency trader Jane Street, whom the regulator accused of manipulating the Bank Nifty in an interim order of 3 July. Jane Street denied the charges and moved the Securities Appellate Tribunal (SAT) against the order.

Ananth Narayan, former whole-time member of Sebi, had in a speech on 17 July said weekly options detracted from capital formation and increased volatility on expiry day. Subsequently, Sebi chief Tuhin Kanta Pandey late August underscored the need for longer-term derivatives contracts, raising concern that weekly expiries contracts run by NSE and BSE could be discontinued by the regulator.

Later, on 31 October, at the Business Standard BFSI Summit 2025, Pandey said Sebi had taken a calibrated approach following market-wide consultations to contain the irrational exuberance of investors without stifling the market. Ruling out any drastic measures, he had said: “Can we just shut down the market just like that? This is a very important question?”

He reassured the industry that any further steps would be taken only after public consultation and more data analysis to ensure a balanced outcome.

K. Suresh told Mint that Sebi had taken note of ANMI’s earlier suggestions—on reforming stock lending and borrowing mechanism that permits institutions to lend idle shares and earn interest on them, while at the same time facilitating short selling of shares by arbitrageurs and other constituents. The regulator is working on refurbishing the mechanism, he said.