Risk Containment Measures in the Indian Stock Index Futures Market



1. Background

The Securities and Exchange Board of India (SEBI) appointed a committee under the chairmanship of Dr. L. C. Gupta in November 1996 to "develop appropriate regulatory framework for derivatives trading in India". In March 1998, the L. C. Gupta Committee (LCGC) submitted its report recommending the introduction of derivatives markets in a phased manner beginning with the introduction of index futures. The SEBI Board while approving the introduction of index futures trading mandated the setting up of a group to recommend measures for risk containment in the derivative market in India.

Accordingly, SEBI constituted a group consisting of the following in June, 1998:
 

  • Prof. J.R. Varma, Chairman
  • Dr. R.H. Patil, The National Stock Exchange
  • Mr. Ravi Narain, The National Stock Exchange
  • Mr. Janak Raj, The Reserve Bank of India
  • Mr. Himanshu Kaji, The Stock Exchange, Mumbai
  • Mr. Ajit Surana, The Stock Exchange, Mumbai
  • Mr. Brian Brown, Indosuez W.I. Carr Securities
  • Mr. K.R. Bharat, Credit Suisse First Boston
  • Mr. Sarosh Irani, Jardine Fleming
  • Mr. O.P. Gahrotra, Member Secretary, SEBI

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