future trading strategy

Jun 28th, 2015
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The members of the derivatives segment are also required to make their clients aware of the risks by issuing to the client the Risk Disclosure Document and obtain a copy of the same duly signed by the client.

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RULES AND REGULATIONS OF DERIVATIVESMARKETS - OPTIONSREGULATORYFRAMEWORKThe trading ofderivativesis governed byprovisions containedSC(R)A [Securities ContractRegulation Act] 1956SEBI Act 1992Stock exchanges.REGULATION FOR DERIVATIVES TRADINGThe derivatives exchange/segment should have a separate governingcouncilRepresentation of trading/clearing members shall be limitedto maximum of 40% of the total members of the governing councilThe exchange have to obtain prior approval of SEBI before start of tradingin any derivative contract.The members of the derivative segment would need to fulfill the eligibilityconditions as laid down by the L. C. Gupta committee.The clearing and settlement of derivatives trades would be through aSEBI approved clearing corporation/house i.e NSCCL (The NationalSecurities Clearing Corporation Limited)Derivative brokers/dealers and clearing members are required to getregistered with SEBI (Securities Exchange Board of India)The minimum networth required for clearing members of the derivativesclearing corporation/house shall be Rs.300 Lakh.The minimum contract value shall not be less than Rs.2 Lakh.The initial margin requirement, exposure limits and margin demandsrelated to the risk of loss on the position will be prescribed by SEBI/Exchangefrom time to time.The members of the derivatives segment are also required to make their clientsaware of the risks by issuing to the client the Risk Disclosure Document and

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