ISSUING AUTHORITY : SECURITIES AND EXCHANGE BOARD OF INDIA
DATE OF ISSUE : 05/12/2013
EFFECTIVE DATE : IMMEDIATE EFFECT
CIRCULAR NO. CIR/MRD/DRMNP/35/2013India will allow stock exchanges to introduce cash-settled Interest Rate Futures (IRF) on 10-year government securities, in a bid to develop local debt markets. The introduction will be on pilot basis.
SEBI has permitted two different designs for cash-settled futures on 10-year Government bonds—coupon-bearing government security as underlying and coupon-bearing notional 10-year Government of India security with settlement price based on basket of securities as the underlying.
An IRF is a contract between the buyer and seller agreeing to the future delivery of any interest-bearing asset. The product allows the buyer and seller to lock in the price of the interest-bearing asset for a future date.
For detailed Circular, please follow the link below:
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