Business

New derivative products to hit market

MUMBAI: The Securities and Exchange Board of India (SEBI) Board on Wednesday approved (in principal) introduction of new derivative products based on the interim recommendations made by the SEBI Committee on Derivatives headed by Prof. M. Rammohan Rao.

“The products will be introduced under suitable regulatory framework in due consultation wherever necessary with other regulatory authorities,” SEBI stated in a press release immediately after the board meeting.

The new derivative products will relate to: Mini-contracts on equity indices; Options with longer life or tenure; Volatility index and F&O contracts; Options on Futures; Bond Indices and F&O contracts; Exchange-traded currency (foreign exchange) Futures & Options; and introduction of exchange-traded products to cater to different investment strategies.

It is expected that these new derivative products will provide investors with a larger range of risk mitigation products. In addition, the SEBI Committee on Derivatives is expected to finalise its recommendations on suitable OTC derivative products.

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