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Informist, Saturday, Jun. 28, 2025

 

--NSE: To start liquidity enhancement scheme in electricity futures Jul 11

 

NEW DELHI – The National Stock Exchange of India Ltd. will introduce a liquidity enhancement scheme in electricity futures, with effect from Jul. 11, it said in a circular. The exchange has not yet begun trade in electricity futures, but a top official had said on Thursday that a circular announcing the launch on its commodity derivatives segment would be issued in the next two-three weeks.

 

Trading members interested in providing continuous quotes as market makers have to register with the exchange. NSE will appoint two market makers for electricity futures contract based on a bidding procedure. The successful bidder will be appointed market maker for six months from Jul. 11, according to the circular.

 

The eligibility criteria for the market makers includes a net worth of INR 50 million and no serious disciplinary action against the member in the last year. Members should also have algo registration in the commodity derivatives segment, according to the circular. "The exchange reserves the right to terminate the services of the MMs (market makers) in case of non-fulfillment of their quoting obligations or any other actions that are detrimental to the development of the market," it said.

 

The symbol of the electricity futures contract is 'ELECMBL'. The contract will commence on the first business day of the launch month and expire on the second-last business day of the month. In case the day of expiry falls on a holiday, the preceding business day will be taken. The base value of the contracts will be in INR per megawatt-hour and the trading unit will be 50 MWh, according to the circular.

 

The maximum order size will be 50 times the trading unit and the tick size or the minimum price movement will be INR 1 per MWh. The initial margin will be minimum 10% or based on the standard portfolio analysis of risk. The contracts will be settled in cash.

 

NSE will launch contracts expiring in July, August, and September after approval from the Securities and Exchange Board of India. Contracts expiring in October and thereafter will be launched four months before their expiries.  End

 

Reported by Ashutosh Pati

Edited by Avishek Dutta

 

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