SEBI allows cash trading in interest rate futures on 2-year and 5-year GoI securities

The Securities and Exchange Board of India has permitted the introduction of cash-settled futures on 2-year and 5-year notional coupon bearing Government of India (GoI) securities on currency derivatives segment of stock exchanges.

Stock exchanges, however, have to take prior permission from SEBI for starting such trading.

The product will be underlying notional coupon bearing 2-year GoI security with a notional coupon of 7 per cent paid
semi-annually with a face value of Rs100, SEB said in a release.

The trading hours would be from 9 am to 5.00 pm and the size of the contract will be Rs2 lakh.

The quotation would be similar to the quoted price of the GoI securities and the maximum maturity of the contract would be 12 months.

To begin with, three serial monthly contracts can be introduced.