The Securities and Exchange Board of India confirmed on July 15 that exchanges would be allowed to offer physically settled equity derivatives, though the regulator stopped short of announcing the delivery mechanism.
At the moment two exchanges, the Bombay Stock Exchange and National Stock Exchange, offer cash-settled equity futures and options.
SEBI said that if either of them wanted to offer physically settled contracts, it would have to submit: “a detailed framework for implementation of physical settlement of stock derivatives”.
“Stock exchanges may introduce the...