European Style Stock Options

Exercise style flexibility allows exchanges to adopt European or American stock options, with uniform application and SEBI approval for changes.

Allows stock exchanges to adopt either European or American exercise styles for stock options, requiring that an exchange apply its chosen style uniformly to all eligible stocks and obtain SEBI approval before changing styles. Contract specifications and the risk management framework applicable to American style options apply to European style options unless SEBI approves modifications. Exchanges introducing European style options must implement systems and procedures, amend bye-laws and rules, and notify market participants and the public at least one month prior to implementation.