Natural Gas Futures Get SEBI Nod for NSE
Why in the news
The securities regulator cleared the NSE to introduce futures on Indian natural gas, a move aimed at transparent, market-driven pricing of the fuel.
Key facts
- Approving body: SEBI; exchange: NSE.
- Product: Indian Natural Gas futures, for market-based price discovery.
- Structure: monthly contracts, with 12 tradable at all times.
- Contract design and launch date are yet to be announced.
- Joint effort of NSE (derivatives market) and the Indian Gas Exchange (IGX), the spot trading platform.
About futures contracts
- Agreements to buy or sell an asset at a fixed price on a set future date.
- Uses: hedging price risk, speculation and price discovery.
- Common in commodities such as oil, metals and farm products.
Exam angle
- Regulator: SEBI; exchange: NSE; partner: IGX.
- Number: 12 monthly contracts open at any time.
- Concept: price discovery through futures.