The Securities and Exchange Board of India (SEBI) is set to introduce early-pay-in (EPI) settlement for options contracts in the commodity derivatives sector. Currently, such benefits are solely applicable to commodity futures contracts.
In a consultation paper released on Tuesday, SEBI noted that it has received requests to extend the EPI benefit to options contracts. At present, this advantage is only available for futures contracts.
The proposal underwent review during a meeting of the Working Group (WG) tasked with evaluating the existing regulatory framework concerning delivery and settlement in the Agricultural Commodity Derivatives Segment. Following substantial discussions, the WG recommended that the early pay-in benefit should also be extended to options contracts.
Moreover, the WG’s recommendation was subsequently presented to the Commodity Derivatives Advisory Committee during its meeting in February, where a broad consensus was reached in support of the proposal.
SEBI has requested comments on the consultation paper by May 26.
