Introduction of future contracts on Corporate Bond Indices

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....ee of SEBI, it has been decided to permit Stock Exchanges to introduce derivative contracts on indices of corporate debt securities rated AA+ and above. To start with, the Stock Exchanges are permitted to launch future contracts on corporate bond indices. 3. The details regarding index composition, contract specifications, position limits, risk management framework, etc. for introduction of future contracts on corporate bond indices are given at Annexure A. 4. The stock exchanges desirous of introducing such contracts shall submit a detailed proposal to SEBI for approval, inter alia, providing details relating to underlying corporate bond index, the index methodology, contract specifications, applicable trading, clearing & settlement me....

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....ewed (at least on half-yearly basis). iv. Constituents of the index shall be aggregated at issuer level for the purpose of determining exposure limits for single issuer, group, sector, etc. v. Single issuer shall not have more than 15% weight in the index. vi. There shall be at least 8 issuers in the index. vii. The index shall not have more than 25% weight in a particular group of issuers [excluding securities issued by Public Sector Undertakings (PSUs), Public Financial Institutions (PFIs) and Public Sector Banks (PSBs)]. viii. The index shall not have more than 25% weight in a particular sector (excluding securities issued by PSUs, PFIs and PSBs). ix. The duration buckets of the index may be decided by the stock exchanges. ....

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....half an hour volume weighted average price of the contract. In the absence of last half an hour trading, theoretical price shall be considered. The methodology used for the theoretical price computation shall be published on the stock exchange website. 8. Final Settlement Price Final settlement price for the derivative contracts shall be the closing price of the underlying index on the expiry day or last trading day of such derivative contracts. 9. Settlement Mechanism The contracts would be settled in cash in Indian Rupee (INR). 10. Settlement Day Settlement day shall be the next working day of the expiry day. 11. Position Limits Category Position limit Trading Members/ Mutual Funds / Insurance Companies /Housing Financ....