Mumbai: Capital market regulator, Sebi, on Saturday said that it has decided to allow physical delivery in the derivatives segment but no timeline has been fixed for this.
“The Sebi Board has decided to allow physical delivery in the derivatives segment. There has been a demand for this for some time now and the Board felt that there was some substance in this,” Sebi chairman, CB Bhave, told reporters.
Sebi will discuss with the stock exchanges and institute an appropriate mechanism for physical delivery in derivatives market, he said.
“This issue would now be discussed with the stock exchanges and an appropriate mechanism for physical delivery in derivatives would be evolved,” Bhave said.
“There will be a need for proper risk-containment systems,” he added.
Long-term contracts in derivatives, now only for three-years, would be possible for five-years, he said.
“The Board felt that the time is right and we have seen volumes build-up there. Long-term contracts up to five-years will also be possible,” he said.
The Sebi Board, in its meeting on Saturday, also took a decision that in the primary issuance process, Qualified Institutional Buyers (QIBs) will be required to pay 100% money in line with other investors on or after 1 May this year, Bhave said.