Business Standard

Sebi bans mini derivative contracts

NSE will have to discontinue its product after its three month contract of Mini Nifty expire in December

Related News

With a view to keep retail investors away from the derivative segment, the Securities and Exchange Board of India (Sebi) today asked stock exchanges to discontinue mini derivative contracts.

The National Stock Exchange (NSE) had mini contracts for its key benchmark index S&P CNX Nifty. Bombay Stock Exchange (BSE) had applied for re-launching mini contracts for Sensex to Sebi.

The lot size for mini contracts is half that of regular index contracts and retail investors, who wanted to trade derivatives, were able to take advantage at half the cost. had approved them in 2007 but now felt they were attracting lot of small players.

“With a view to ensure that small/retail investors are not attracted towards derivatives segment, it has now been decided to discontinue on Index,” Sebi said.

will have to discontinue its product after its three month contract of Mini Nifty expire in December. However, third exchange MCX SX will not be affected by the move as it has said that their thrust will be mainly on delivery based trading rather than derivatives.

Savio Shetty, Strategist, Prabhudas Lilladher said, “Discontinuation of mini contracts won't have much impact on the derivatives market volumes as the open interest in this product was already very low.”

"Discontinuation of mini contracts is largely a non-event from the market point of view as open interest in these contracts were thin. The product was meant for a very specific category of investors who wanted to take small size bet on Nifty. Retail investors always have an option of trading in Nifty contracts which are highly liquid," said Yogesh Radke, head of quantitative research at financial services company Edelweiss Securities

Experts say while Sebi has taken step to discourage derivative trading for retail investors, government too needs to do its bit by bringing down securities transaction tax (STT) in cash equities. STT on derivative trading at 0.017% lower than that in cash equity segment, which is at 0.025%.

Read more on:   
|
|

Read More

BSE launches carbon index

Premier bourse BSE, in collaboration with the UK government, today launched BSE Carbonex, the first-of-its-kind index in India or any emerging market ...

Quick Links

 

Market News

Agri commodities' price to decline by 5% on diesel price cut

The Centre decided to decontrol diesel leading to a Rs 3.37 a litre price cut

Potato prices to stay firm for a while

New crop arrivals are expected from Punjab and West Bengal

Brent extends gains above $85 as China demand rises

Brent edged up on Tuesday, holding above $85 a barrel as robust China oil demand supported prices, although gains were capped by oversupply and ...

Commodity exchanges try to revive volumes

They are banking on forward trading to make up for the loss due to the dwindling interest in gold and non-farm commodities futures

Today's picks- 21 October 2014

Nifty, Bank Nifty, BHEL, GAIL & Hindustan Unilever

Back to Top