SEBI is looking forward to allowing futures trade in petrol and diesel

Securities and Exchange Board of India (SEBI) is considering to allow futures trade in petrol and diesel. SEBI is also considering re-allowing Futures trade in tur and urad. Futures trade in tur and urad was banned in 2007. Because of a spike in prices of these commodities.

This information is given by Chhavi Kapoor SEBI General Manager (Commodity Segment) at a webinar hosted by the PHD Chamber of Commerce and Industry (PHDCCI). She also gave a hint that many other products are in the pipeline and these products will be looked into, if the market is favourable. Now futures trading is permitted only in crude oil.

Futures is a financial contract or a legal agreement to buy or sell something at a predetermined price at a specified time in the future, between parties not known to each other. Here two traders agreed to buy and sell underlying assets at a predetermined price in the future. The current market price is not considered here. The trade is done at the predetermined price not at the current price. The asset may be physical commodities or other financial instruments like bond, securities, etc.

The Securities and Exchange Board of India is the regulatory body of the securities, and commodity market in India. It was established in 1992. The Securities and Exchange Board of India given Statutory Powers on 12 April 1992 through the SEBI Act, 1992. SEBI is a statutory regulatory body entrusted with the responsibility to regulate the Indian capital markets. Its headquarters is at Mumbai and Ajay Tyagi is the current chairman. The objective of SEBI is to ensure that the Indian capital market works in a systematic manner and provide investors with a transparent environment for their investment.