Sebi mulls compulsory delivery for metal derivatives contracts

It is unclear if there will be separate contracts for delivery-based settlement or compulsory delivery settlement in existing metals contracts

The markets regulator is considering a proposal for delivery-based settlement of metal derivatives contracts. 

Both the Multi Commodity Exchange (MCX) and National Commodity and Derivatives Exchange (NCDEX) had proposals in this regard and these are being discussed with the Securities and Exchange Board of India (Sebi).

Sebi has been emphasising on physical delivery settlement. As of now, all metals contracts (except gold and silver) and all energy contracts are settled in cash. Which means at the end, the difference between contract purchase and settlement price is settled in cash, without delivery.