Bourses get Sebi's approval to launch derivatives on bond indices

The Securities and Exchange Board of India (Sebi) has permitted stock exchanges to introduce index derivatives contracts based on corporate debt securities rated AA+ and above.

Sebi’s decision is aimed at enhancing liquidity in the bond market. It will also give an opportunity to investors to hedge their positions.

“To start with, the stock exchanges are permitted to launch futures contracts on corporate bond indices,” said Sebi, in a circular issued on Tuesday.

The stock exchanges will have to submit a detailed proposal to the regulator for approval. They will have to provide details related to underlying index, methodology, contract