SEBI UNVEILS INTEREST RATE FUTURES GUIDELINES

Securities and Exchange Board of India (SEBI) has issued guidelines for trading in interest rate futures, as per which the 10-year Government securities can be traded on bourses, a development that will deepen the debt market. According to the guidelines, the contract size for the futures trading would be Rs. 2 lakh with a maximum maturity period of 12 months. The contracts cycle would consist of four fixed quarterly contracts expiring in March, June, September and December.
The notional coupon rate for such trade would be 7% to be compounded every six months.