The Securities and Exchange Board of India vide its notification dated 24th March 2022 has permitted the recognised stock exchanges having a commodity derivative segment to introduce options on commodity indices. The recognised Stock Exchanges with a Commodity Derivative segment, willing to introduce trading in options on commodity indices shall take prior approval of SEBI for the same.
Stock Exchanges shall submit at-least past three-years data of the index constructed along with data on monthly volatility, roll over yield for the month and monthly return while seeking approval from SEBI. On approval, the Stock Exchange(s) shall also publish the above data on their website before launch of the contract.
Option contracts can be introduced on those indices on which futures contracts are available. The stock exchanges shall have the flexibility to set the expiry date for contracts. However, the expiry date shall not coincide with the roll-over period of the constituents of the underlying index.
