Indian Derivatives Market
Starting from a controlled economy, India has moved towards a world where prices fluctuate every day.
The introduction of risk management instruments in India gained momentum in the last few years due to liberalization process and Reserve Bank of India's (RBI) efforts in creating currency forward market.
Derivatives are an integral part of liberalization process to manage risk.
NSE gauging the market requirements initiated the process of setting up derivative markets in India.
In July 1999, derivatives trading commenced in India Table 2.1 Chronology of instruments
In less than three decades of their coming into vogue, derivatives markets have become the most important markets in the world. Today, derivatives have become part and parcel of the day-to-day life for ordinary people in major part of the world.
Until the advent of NSE, the Indian capital market had no access to the latest trading methods and was using traditional out-dated methods of trading. There was a huge gap between the investors' aspirations of the markets and the available means of trading. The opening of Indian economy has precipitated the process of integration of India's financial markets with the international financial markets. Introduction of risk management instruments in India has gained momentum in last few years thanks to Reserve Bank of India's efforts in allowing forward contracts, cross currency options etc. which have developed into a very large market.
Last Updated on 3/4/2011
The introduction of risk management instruments in India gained momentum in the last few years due to liberalization process and Reserve Bank of India's (RBI) efforts in creating currency forward market.
Derivatives are an integral part of liberalization process to manage risk.
NSE gauging the market requirements initiated the process of setting up derivative markets in India.
In July 1999, derivatives trading commenced in India Table 2.1 Chronology of instruments
| 1991 | Liberalization process initiated |
| 14-Dec-95 | NSE asked SEBI for permission to trade index futures. |
| 18-Nov-96 | SEBI setup L.C.Gupta Committee to draft a policy framework for index futures. |
| 11-May-98 | L.C.Gupta Committee submitted report. |
| 07-Jul-99 | RBI gave permission for OTC forward rate agreements (FRAs) and interest rate swaps. |
| 24-May-00 | SIMEX chose Nifty for trading futures and options on an Indian index. |
| 25-May-00 | SEBI gave permission to NSE and BSE to do index futures trading. |
| 09-Jun-00 | Trading of BSE Sensex futures commenced at BSE. |
| 12-Jun-00 | Trading of Nifty futures commenced at NSE. |
| 25-Sep-00 | Nifty futures trading commenced at SGX. |
| 02-Jun-01 | Individual Stock Options & Derivatives |
In less than three decades of their coming into vogue, derivatives markets have become the most important markets in the world. Today, derivatives have become part and parcel of the day-to-day life for ordinary people in major part of the world.
Until the advent of NSE, the Indian capital market had no access to the latest trading methods and was using traditional out-dated methods of trading. There was a huge gap between the investors' aspirations of the markets and the available means of trading. The opening of Indian economy has precipitated the process of integration of India's financial markets with the international financial markets. Introduction of risk management instruments in India has gained momentum in last few years thanks to Reserve Bank of India's efforts in allowing forward contracts, cross currency options etc. which have developed into a very large market.
Last Updated on 3/4/2011
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