TMI BlogCriteria for Settlement Mode of Commodity Derivative ContractsX X X X Extracts X X X X X X X X Extracts X X X X ..... 1. In order to effectively discharge their hedging function, commodity derivative contracts must be anchored to their respective underlying physical markets. An appropriate settlement mode and/or presence of other supporting conditions play a crucial role in ensuring convergence of prices between the derivatives market and the spot market. 2. In view of the above, in consultation with the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nadequate logistics and transport infrastructure. 2.2.2. There is availability of reliable benchmark price of the commodity which can be used as reference for settlement price. Exchanges shall satisfy themselves that the reference spot price is ro bust fair indicator of prevailing prices and not susceptible to any distortion/manipulation. 2.3. Subject to the above conditions, both cash set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r website. 6. This circular is available on SEBI website at www.sebi.gov.in under the category Circulars and Info for Commodity Derivatives . Yours faithfully, Vikas Sukhwal Deputy General Manager Division of Market Policy Commodity Derivatives Market Regulation Department Tel No.022-26449234 Email: vikass@sebi.gov.in - Circular - Trade Notice - Publ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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