Overview
- SEBI’s latest circular instructs exchanges to modify existing non-benchmark indices used for derivatives rather than launch replacements.
- Bankex and FinNifty must meet the new norms in a single tranche by December 31, 2025, while Nifty Bank will be reweighted across four monthly phases completing by March 31, 2026.
- Eligibility rules require at least 14 constituents with the top stock capped at 20% and the top three together at 45%, with all weights in descending order.
- Exchanges and clearing corporations must amend bye-laws, update systems, and alert market participants in advance to ensure orderly implementation.
- Markets were modestly lower on October 31 as changes were priced in, the Nifty PSU Bank index hit a record high, and analysts flagged potential Nifty Bank additions such as Yes Bank and Indian Bank with gradual weight cuts for HDFC Bank, ICICI Bank and SBI.