Options on Commodity Indices permitted; exchanges must secure approval and follow prescribed product design and risk management framework. Recognised stock exchanges with commodity derivatives segments may introduce options on commodity indices with prior approval and must follow the prescribed product design and risk management framework: cash settled European style options on indices with existing futures; minimum strikes per expiry; specified contract size, trading hours, expiry and tenor rules; final settlement by volume weighted average of constituents in the final hour; distinct position limits for clients and members; and CPMI IOSCO aligned margining, portfolio level client margins, real time scenario application, mark to market within margining, and additional option specific margins and charges.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Options on Commodity Indices permitted; exchanges must secure approval and follow prescribed product design and risk management framework.
Recognised stock exchanges with commodity derivatives segments may introduce options on commodity indices with prior approval and must follow the prescribed product design and risk management framework: cash settled European style options on indices with existing futures; minimum strikes per expiry; specified contract size, trading hours, expiry and tenor rules; final settlement by volume weighted average of constituents in the final hour; distinct position limits for clients and members; and CPMI IOSCO aligned margining, portfolio level client margins, real time scenario application, mark to market within margining, and additional option specific margins and charges.
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