Investors’ Preference and Regulatory Aspects in the Indian Derivatives Market

Dynamics of Derivatives, 2020

6 Pages Posted: 1 Oct 2020

See all articles by Preksha Dassani

Preksha Dassani

Andhra University - Department of Commerce and Management

Vijaya Kittu Manda

Gandhi Institute of Technology and Management (GITAM), Institute of Management

Vishnu S Kumar

St. Aloysious College, Edathua, Kerala, India

Date Written: January 9, 2020

Abstract

The Indian Stock market undoubtedly experienced tremendous growth in the trading activity in the last twenty-five years. The Derivatives segment of the market began its operations with the launch of Index Futures by the National Stock exchange of India (NSE) in the year 2000. The Derivatives, as a financial product, derives its value from an underlying asset and is primarily designed to reduce the risk which businesses and individuals face due to the fluctuations in the asset prices. It helps individuals and companies to undertake risky projects with high returns and use derivatives as a tool to hedge risk, which can potentially lead to wealth creation. The popular instruments of equity derivatives market are- Forward, Future, Option, and swaps. This paper presents the legal framework and regulatory aspects by the market regulator Securities and Exchange Board of India (SEBI) involving derivatives that is based on the recommendations of the L.C. Gupta Committee. SEBI laid its objectives in regulating derivative markets to ensure transparent trading environment, safety, and integrity.

Keywords: Derivatives, Derivative Regulations, Market Regulations, SEBI

JEL Classification: G130, G180

Suggested Citation

Dassani, Preksha and Manda, Vijaya Kittu and S Kumar, Vishnu, Investors’ Preference and Regulatory Aspects in the Indian Derivatives Market (January 9, 2020). Dynamics of Derivatives, 2020, Available at SSRN: https://ssrn.com/abstract=3675178 or http://dx.doi.org/10.2139/ssrn.3675178

Preksha Dassani

Andhra University - Department of Commerce and Management ( email )

India

Vijaya Kittu Manda (Contact Author)

Gandhi Institute of Technology and Management (GITAM), Institute of Management ( email )

Rushikonda
Gandhi Nagar
Visakhapatnam, 530045
India
+919849519188 (Phone)

Vishnu S Kumar

St. Aloysious College, Edathua, Kerala, India ( email )

India

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