BSE is introducing monthly Futures and Options (F&O) contracts on the BSE FOCUSED IT Index in the equity derivatives segment. The contracts will be available for trading from May 11, 2026, with three initial monthly series covering May 2026, June 2026, and July 2026.

Key Points

• Monthly Futures and Options contracts on BSE FOCUSED IT Index will be launched effective May 11, 2026
• Three monthly series will be introduced simultaneously: May 2026, June 2026, and July 2026
• Contract specifications are detailed in Annexure 1 of the circular
• Updated contract files (EQD_COddmmyyy.csv and BSE_EQD_CONTRACT_ddmmyyyy.csv) will be available on BSE Extranet at path /FNO/COMMON from May 8, 2026 (end of day)
• No changes to the structure of existing reports
• Settlement procedure and details will be communicated separately by the respective clearing corporations

Regulatory Changes

This circular introduces a new derivative product on the BSE FOCUSED IT Index, expanding the equity derivatives segment offerings. The contract specifications are governed by the terms in Annexure 1 of this notice.

Compliance Requirements

• Trading members must download and load the updated contract files (EQD_COddmmyyy.csv and BSE_EQD_CONTRACT_ddmmyyyy.csv) from BSE Extranet (/FNO/COMMON) into their trading applications before commencing trading on May 11, 2026
• Members should contact their designated Relationship Manager for any clarifications
• Members should await separate communication from clearing corporations regarding settlement procedures

Important Dates

• May 8, 2026: Updated contract files available on BSE Extranet (end of day)
• May 11, 2026: Launch date for BSE FOCUSED IT Index Futures and Options contracts; trading members must load updated contract files before this date

Impact Assessment

This circular expands derivative product offerings on BSE by introducing index-based F&O contracts on the BSE FOCUSED IT Index, a sector-specific index tracking focused IT companies. The launch provides traders and investors with a new hedging and speculative instrument tied to the IT sector. Trading members need to update their systems prior to the launch date. The addition of three simultaneous monthly series provides immediate liquidity depth. Settlement details pending from clearing corporations may require additional preparation from participants.

BSE’s Index Cell has announced changes to the index methodology for two equity indices — BSE BANKEX and BSE Focused IT Index — effective 29 May 2026. The primary change tightens the constituent weighting caps in BSE BANKEX, reducing the individual stock cap from 20% to 19% and the aggregate top-3 stock cap from 45% to 43%. Market coverage, liquidity criteria, and buffer rules remain unchanged.

Key Points

• Individual constituent weight cap in BSE BANKEX reduced from 20% to 19%
• Aggregate weight cap for top 3 stocks reduced from 45% to 43%
• Aggregate weight cap for top 5 stocks remains unchanged at 60%
• Excess weight continues to be distributed proportionally across remaining index stocks
• Descending weight structure (top to bottom) is maintained
• Market coverage methodology (minimum 90% float-adjusted market cap), liquidity criteria (minimum 90% trading frequency over preceding six months), and buffer rules (2% inclusion/exclusion buffer) are unchanged
• Minimum constituent count of 14 is preserved; preference given to derivative stocks when filling minimum count

Regulatory Changes

The revised constituent weighting rules for BSE BANKEX are:

No changes are specified for the BSE Focused IT Index methodology beyond what is noted in the notice header.

Compliance Requirements

• Index fund managers, ETF providers, and passive investment vehicles tracking BSE BANKEX or BSE Focused IT Index should review and update their rebalancing models to reflect the new weighting caps ahead of the effective date.
• Entities using these indices as benchmarks should update benchmark documentation and disclosures accordingly.

Important Dates

• Notice Date: 13 April 2026
• Effective Date: 29 May 2026 (next quarterly rebalance at which new methodology will be applied)

Impact Assessment

The tightening of weighting caps in BSE BANKEX will marginally reduce concentration risk by limiting the influence of the largest banking constituents. The reduction of the individual cap from 20% to 19% and the top-3 aggregate from 45% to 43% will redistribute weight slightly toward mid-tier banking stocks within the index. This is a low-disruption change but will require rebalancing by index-linked products (ETFs, index funds) at the next quarterly review on or around 29 May 2026. The impact is primarily operational for fund managers rather than systemic for market participants broadly.

BSE has issued an update (Notice No. 20260413-47) as a continuation of Exchange Notice 20260413-24, clarifying that the revision in constituent weightings for BSE BANKEX will be effective from May 29, 2026. The notice also references the BSE Focused IT Index in the subject context.

Key Points

• This notice is a follow-up to Exchange Notice 20260413-24 regarding index methodology changes
• Revision in constituent weightings for BSE BANKEX will be effective from May 29, 2026
• The change falls under the Index category for the Equity segment
• No attachments were included with this notice

Regulatory Changes

The constituent weightings of BSE BANKEX are being revised as part of an index methodology update. The specific details of the weighting changes were communicated in the original notice 20260413-24; this circular serves as a clarification on the implementation timeline.

Compliance Requirements

• Market participants, fund managers, and ETF operators tracking BSE BANKEX should note the effective date and update their portfolios or tracking mechanisms accordingly by May 29, 2026
• Index fund managers and passive investors benchmarked to BSE BANKEX should prepare for rebalancing prior to the effective date

Important Dates

• Notice Date: April 13, 2026
• Effective Date of Constituent Weighting Revision: May 29, 2026

Impact Assessment

The revision in constituent weightings for BSE BANKEX will impact index funds, ETFs, and other investment products benchmarked to this index. Fund managers will need to rebalance portfolios to reflect the new weightings by the effective date. The change may cause minor market movements in banking sector stocks included in the BANKEX index as institutional investors adjust positions ahead of May 29, 2026.