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[SEBI] Discussion Paper On Growth & Development Of Equity Derivative Market In India

Jul 12, 2017: SEBI has issued a "Discussion Paper on Growth and Development of Equity Derivative Market in India" for public comments.

Objective - 1. To solicit the comments/views from stakeholders including on issues related to trading in derivatives, participant’s profile, product mix, stock eligibility, leverage related matters and product suitability framework to further strengthen the framework in line with the emerging trends and global best practices. 

Introduction - 2. Derivatives market in India has been growing rapidly in recent years. Orderly growth, development and alignment of both cash and derivatives markets is important. Keeping this objective in mind, the discussion paper has been prepared to undertake an assessment of the derivatives market in India so as to evaluate whether there is a need to further strengthen the regulatory framework for derivatives in India.

Background - 3. SEBI constituted a committee under the chairmanship of Dr. L. C. Gupta in November 1996 to "develop appropriate regulatory framework for derivatives trading in India". In March 1998, the L. C. Gupta Committee (LCGC) submitted its report recommending the introduction of derivatives market in a phased manner beginning with the introduction of index futures.

4. In addition to the above, SEBI had also constituted Derivative Market Review Committee under the Chairmanship of Prof M Rammohan Rao to review development of the derivatives market and suggest future course of action. The committee inter-alia recommended to widen the range of products such as option contracts with longer life or tenure, creation of Volatility index & F&O contacts on it, options of futures, exchange traded currency contracts and mini contracts on equity indices. The committee had also made recommendations on operational issues such as revision of eligibility criteria for introduction of F&O on stocks & upward revision on position limits etc.

The full report is available at SEBI website.

Comments/ suggestions may be provided in the format given below:-

Name of entity / person / intermediary/ Organization
Sr. No. | Issues | Suggestions | Rationale

Comments can be emailed on or before August 10, 2017 to vishalp@sebi.gov.in or sent by post, to:-Vishal M Padole, Assistant General Manager, Division of Policy, Market Regulation Department, Securities and Exchange Board of India SEBI Bhavan, Plot No. C4-A, "G" Block, Bandra Kurla Complex, Bandra (East), Mumbai-400051

Extra Notes for Readers

1) SEBI | Sep 07, 2017 | Addendum to “Discussion paper on Growth and Development of Equity Derivative Market in India"

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