New derivative offerings at least 2 years away
Investors will have to wait for the new derivative products that the capital market regulator approved in principle last week.
By TNN |
NEW DELHI: Investors will have to wait for the new derivative products that the capital market regulator approved in principle last week, as the regulator needs at least a couple of years to put in place a framework for their trading.
Sources told ET that the consultative process to design the products and to evolve the margining and risk management systems would take at least two years. The market regulator, along with the central bank, will work on freezing nuances such as circuit filters, margin on transactions and the frequency of revising the margins, which could take quite some time, said a source. The products are exotic in nature and hence the delay, said the source.
The slew of products SEBI had announced on November 15 are expected to go a long way in deepening the market and let investors aggressively hedge their stock bets. These are also intended to attract global investors through dollar or euro futures in local exchanges.
The products include mini contracts on equity indices that will enable efficient hedging of smaller portfolios, options with tenures much longer than the currently-allowed three months and a volatility index that would enable a market player to judge the expected volatility in the near future. This will also include currency futures and options that will allow exporters/importers to trade foreign currency derivatives in local bourses.
Sources told ET that the consultative process to design the products and to evolve the margining and risk management systems would take at least two years. The market regulator, along with the central bank, will work on freezing nuances such as circuit filters, margin on transactions and the frequency of revising the margins, which could take quite some time, said a source. The products are exotic in nature and hence the delay, said the source.
The slew of products SEBI had announced on November 15 are expected to go a long way in deepening the market and let investors aggressively hedge their stock bets. These are also intended to attract global investors through dollar or euro futures in local exchanges.
The products include mini contracts on equity indices that will enable efficient hedging of smaller portfolios, options with tenures much longer than the currently-allowed three months and a volatility index that would enable a market player to judge the expected volatility in the near future. This will also include currency futures and options that will allow exporters/importers to trade foreign currency derivatives in local bourses.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
