BSE receives Sebi nod to launch F&O contracts for Sensex Next 30 index
GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims·
Why in news
SEBI granted BSE permission to launch cash-settled monthly index futures and options (F&O) contracts for the Sensex Next 30 index.
Background
BSE plans to launch monthly index futures and options contracts with expiry dates on the last Thursday of each period. The move follows a market decline where the Nifty closed down 1.6% and the BSE Sensex dropped 1.4% due to the Iran-Israel war.
Facts for Prelims
- FactBSE Sensex dropped 1.4% and Nifty closed down 1.6% following the Iran-Israel war.
- BodyBSE (Bombay Stock Exchange) is India's oldest exchange.
- FactBSE reported a 174% increase in net profit and 8% growth in EBITDA for the December quarter.
- FactThe proposed F&O contracts for Sensex Next 30 will be cash-settled.
For Mains
Q. Discuss how the expansion of derivative products like F&O contracts impacts market liquidity and investor protection in the Indian capital markets.
Dimensions to cover in your answer
- Market volatility: Balancing increased liquidity with risks of excessive speculative trading in index derivatives
- Regulatory oversight: SEBI's role in monitoring systemic risks arising from high-leverage cash-settled contracts
Keywords: Capital Markets · Derivatives · Market Liquidity · Regulatory Framework · Systemic Risk
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