SEBI norms for risk management in index options

MUMBAI, DEC. 15. The Securities and Exchange Board of India has issued guidelines for risk management in index options trading settled through cash transaction.

The minimum size contract for the index based options would have to be Rs. 2 lakhs while introducing instrument in market with a maximum maturity for 12 months, SEBI said in a release here today.

The capital markets regulator had adopted portfolio approach while evolving guidelines for covering the risks involved in index based trading and reduce transactions costs in derivatives, it said.

Exchanges could start trading and settlement of options after risk the management system were put into place, it added.

Meanwhile, SEBI has allowed brokers to issue contract notes authenticated by means of digital signatures. Stock broking units would have to obtain digital signature certificate from the certifying authority under the Information Technology Act 2000, the release said.

- PTI

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Section  : Business
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