MCX and IEX enter into licensing agreement for launching electricity derivatives in India

Multi-Commodity Exchange of India and Indian Energy Exchange have entered into a licensing agreement to launch Electricity derivatives linked to IEX spot electricity prices on MCX trading platform, subject to necessary approvals from the government of India and the concerned regulators. This shall lay the groundwork for a vibrant electricity derivatives market in the country.

The launch of electricity derivatives shall provide an effective risk management avenue and help the value chain participants to hedge price risks and protect their revenue margins. With this India shall also join a select group of developed countries which offer electricity derivatives on an exchange platform.

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