SEBI permits stock exchanges to introduce futures on commodity indices

Capital markets regulator SEBI yesterday permitted stock exchanges with commodity derivative segment to introduce futures on indices. SEBI in a circular said, the stock exchanges, willing to start trading in futures on commodity indices, are required to take prior approval for launching such contracts.

The regulator has directed the stock exchanges to submit proposal with contract specifications and risk management framework for approval



before launching any futures contract on an index. 

The circular comes after SEBI floated a consultation paper in January, where it had proposed rules for product design for future on the indices as part of larger efforts to deepen the participation of institutions in the derivatives segment. The SEBI directives are in line with recommendations of Commodity Derivatives Advisory Committee.