The Indian Capital Market regulator Securities&Exchange Board of India, known as Sebi, has allowed stock exchanges to launch FuturesTrading in commodity indices, as per its circular.
The exchanges which are willing to launch trading in futures on commodities are needed to take prior consent for starting such contracts, the market regulator said in its circular. The regulator added that Stock exchanges will have to submit minimum past three years data of the index constructed together with data on monthly volatility, roll-over yield for the month & monthly return, while seeking approval from Sebi.
The regulator further said that the futures contracts should be in existence on the respective exchanges for at least previous 12-months. The contracts should have traded for at least 90pc of the trading days during the previous 12 months.
As ser circular, the average every day turn-over of the constituent futures contracts during the previous 12-months should at least be Rs.75-crore for agricultural & agri-processed commodities and Rs.500-crore for all other commodities, the circular added.