India will allow physically settled bond futures to be launched for 10-year government securities on a trial basis, the Reserve Bank of India and the capital market regulator said in separate releases on Thursday.
Futures could be derived from either a 10-year government bond with residual maturity between 9 and 10 years, or a basket of 10-year bonds that have residual maturity of between 9 to 11 years, according to market regulator Securities and Exchange Board of India (SEBI).
Foreign investors will not be able to take positions that exceed 10% of open interest or Rs 600 crore, whichever is higher, according to SEBI.