Settlement flexibility for stock derivatives allows cash or physical settlement, subject to exchange systems and SEBI approval. SEBI permits exchanges to offer cash or physical settlement for stock options and futures in any of four configurations, with phased introduction allowed but physical settlement required to be completed within six months. The settlement mechanism must be decided in consultation with Depositories. Physically settled expiries/exercises are subject to the cash segment risk management framework, and cash and derivative settlements remain separate. Exchanges must establish systems, amend bye-laws, notify market participants, publish details, and submit an implementation framework to SEBI; any change of settlement mode requires prior SEBI approval.
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Provisions expressly mentioned in the judgment/order text.
Settlement flexibility for stock derivatives allows cash or physical settlement, subject to exchange systems and SEBI approval.
SEBI permits exchanges to offer cash or physical settlement for stock options and futures in any of four configurations, with phased introduction allowed but physical settlement required to be completed within six months. The settlement mechanism must be decided in consultation with Depositories. Physically settled expiries/exercises are subject to the cash segment risk management framework, and cash and derivative settlements remain separate. Exchanges must establish systems, amend bye-laws, notify market participants, publish details, and submit an implementation framework to SEBI; any change of settlement mode requires prior SEBI approval.
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