New Delhi: Asia’s oldest bourse, the Bombay Stock Exchange (BSE) on Monday declared that it will be introducing physical settlement for all single stock derivatives contracts expiring on or after 13 April.
All futures and options contracts traded on the two national bourses -- BSE and National Stock Exchange (NSE) have been cash settled ever since derivatives were introduced in India in 2000. Cash based settlement in the derivatives segment allows an investor to take a bet on a stock or index without taking a position in the cash market.
On 15 July, capital market regulator Securities and Exchanges Board of India (Sebi) had issued circular allowing exchanges the flexibility to introduce either cash or physical settlement on stock futures and options.