Budget proposes options and index futures in commodities

Finance Minister Arun Jaitley has cleared the way for market regulator Sebi to consider the introduction of new products in the commodities derivative segment.

This means the much awaited options and index futurestrading can now be taken up by the regulator. Last year’s amendment in Securities and Contract Regulation Act had cleared the legal hurdle in introduction of these products.
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Sources close to the development said Sebi will begin the consultation process for these products before allowing exchanges to introduce them. Sebi will make it a pre-requisite for commodity exchanges to upgrade their risk management standards in line with those of the stock exchanges.

Soon a consultation paper will be issued to seek stakeholders’ views on new products. The FM has however not said anything on allowing new set of participants like banks, mutual funds etc in the commodities derivatives. Indian stock market astrology prediction

Sources also explained that for index futures, Sebi will have to prescribe standard index making norms. It will also have to decide in which segments or commodities such products will be introduced. Experts believe the depth and liquidity would determine the commodities in which, “New products can be introduced.” Himanshu Tiwari Astrologer Blog

Ameer Shah, MD & CEO of NCDEX said, “Announcement by the finance minister asking Sebi to introduce new commodity derivative products is much awaited and will increase depth of themarkets with better risk management products for hedgers.”

The Budget shows the government's commitment to using technology in bringing about transparency and efficiency in agricultural markets and helping connect the smallest farmer to the markets, he added.