India has a long tradition of futures trading in various commodities, metals, precious metals as well as the capital market.
Indian Commodity Derivatives Market
- India has six major futures markets and 22 regional futures markets. 150 different commodities are traded on this platform. The same number is more than 300 in the global futures market.
- Digital based futures trading in India started in 2003. Futures trading started around 1875. Often there is a limit on the value of goods traded.
- The regulator decides whether to trade the commodity in the futures market or not, taking into account the demand and supply of goods and prices according to the actual market conditions.
Derivatives Market Timeline
- The international futures market & capital market is monitored by local traders for the derivatives market. Trading timing of capital market & commodity derivatives market are same but traders rely on transactions in Australia, China, Hong Kong, Dubai, London and the United States.
- Most of the domestic developments are due to the development of agricultural commodities, while For ubiquitous commodities like natural gas, crude oil, gold, silver, international market price, supply, demand is important.
Changes in Commodity Derivatives Regulations
- The futures market in the country is controlled by the Futures Market Commission. The Commission looks after the futures market forum, whether it is national or departmental, Transactions, Pricing on the platform, etc.
- Changes in this regulatory system have been suggested by the 2015-16 budget. Accordingly, the forum will now be overseen by SEBI, the Securities and Exchange Board of India.
- After the merger of the two regulatory bodies Futures Market Commission and SEBI. Commission will function as a division under the jurisdiction of SEBI. In addition to regulation of capital markets, Futures market forum will also be regulated by SEBI.
- The regulator will retain the right to decide on which platform the goods should be traded for how long, in which season.
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