BofA expects Indian market regulator's proposed changes to revive derivatives activity

Billionbrains Garage Ventures

16/09/2026 07:05

** BofA Securities sees SEBI's revised auction proposals as positive for Indian retail trading activity, as they could reduce expiry-settlement uncertainty, shorten the CTS-to-CAS transition and simplify cash-derivatives interaction
** Delinking derivatives expiry settlement from CAS closing prices should address key operational issues seen since CAS implementation, BofA says
** SEBI's blended VWAP option uses transactions in the final 30 minutes of CTS (continuous trading session) and the 10-minute CAS (closing auction session), with each period weighted by actual traded value 
** SEBI's alternative CTS-only VWAP proposal excludes CAS and could apply for at least one year
* Both approaches provide a transaction-based settlement framework, helping improve certainty around expiry settlement, BofA says    
** Sees the changes as positive for exchanges and retail brokers, but expects no immediate earnings benefit as consultation remains ongoing
** Expects 2QFY27 activity and earnings to reflect weak August trends, with derivatives normalisation likely in 3QFY27 or later, assuming implementation and gradual participant adaptation
** Billionbrains (Groww) BILO.NS remains exposed, as F&O-linked transaction income accounts for about 55% of revenue, says BofA


 (Reporting by Bharath Rajeswaran in Bengaluru)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))