MCX Gets SEBI Nod to Launch India's First Electricity Derivatives Market

The Multi Commodity Exchange of India Ltd (MCX) has received SEBI approval to introduce electricity derivatives, marking a significant milestone in India's financial and energy markets. This development aligns with SEBI’s collaboration with the Central Electricity Regulatory Commission (CERC) to create a structured framework for power trading.

 

The new derivatives will allow industrial consumers and power distribution companies to hedge against price volatility, offering a cash-settled futures contract initially focused on monthly tenures. The move is expected to enhance market liquidity and provide a risk management tool for stakeholders in the energy sector.

 

Industry experts believe this launch will revolutionize India's power trading landscape, enabling efficient price discovery and reducing dependency on spot markets. The approval follows extensive discussions between SEBI and leading exchanges, including MCX and NSE, to ensure compliance with regulatory standards.

 

Key Highlights:

Source: Angel One | Economic Times | Mint