Comment on Policy on settlement of compulsory delivery derivative contracts

Faisal commented on 08 Aug 2018, 12:16 PM

1. The SEBI circular only defines Stock Derivatives to be physically settled. Physically settling whole of Nifty 50 (or other indices) stocks would cost about 50 lakhs(approx) worth of stocks. Also, exchanges around the world settle index futures in cash(we shouldn’t expect any changes in India too)
2. Most of the commodities are cash-settled. However, MCX is moving towards settling them physically(Gold, Silver, etc) and we will see this happening for more contracts soon.
3. Trading in foreign currency is not allowed by the RBI for retail traders, hence, physical settlement will not be possible for currencies too.

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