SEBI ON CASH SETTLED FUTURES

The Securities and Exchange Board of India (SEBI)  has allowed the stock exchanges to carry out cash settled futures on two and five year notional coupon bearing the government of India security in currency derivatives segment. Bourses need to get approval from the market regulator before introducing these futures. The underlying for these futures would be the notional coupon bearing two year and five year government security with a coupon of seven per cent, paid semi-annually and face value of Rs.100. The size of these contracts will be Rs. 2 lakh, which could be traded from 9 am to 5 am. The maximum maturity of the contracts would be 12 months. Initially, stock exchanges can introduce three serial monthly contracts.