MCX gets Sebi nod to launch electricity derivatives
MCX has received SEBI approval to launch electricity derivatives, marking a major step in India's energy trading evolution. These contracts will help power market participants hedge price risks, support renewable energy goals, and deepen market efficiency in alignment with India's Viksit Bharat vision.
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India's largest commodity exchange The Multi Commodity Exchange of India MCX ) on Friday received a Securities and Exchange Board of India ( Sebi ) nod to launch electricity derivatives , a media release said, calling it a significant milestone in the evolution of India's energy trading landscape."This development underscores the strong commitment and support of the Regulators - SEBI and Central Electricity Regulatory Commission (CERC) - in enabling a dynamic and sustainable power market," the exchange filing said.The Electricity Derivatives Contracts to be introduced by MCX will enable generators, distribution companies, and large consumers to hedge against price volatility and manage price risks more effectively, by enhancing efficiency in the power market, the filing said."This landmark move positions MCX as a torchbearer of innovation in commodity trading, while reinforcing India's ambition towards sustainable energy and capital market development. It also marks a pivotal step toward deepening India's energy markets and aligns with the broader vision of ' Viksit Bharat '," it said.Speaking on the development, Praveena Rai, MD & CEO at MCX said that the introduction of electricity derivatives marks a pivotal development in India's commodities ecosystem. She said that these contracts will offer participants a reliable, transparent, and regulated platform to manage power price risks, which are becoming more dynamic due to renewables and market-based reforms.The launch of electricity derivatives comes in the wake of the country's growing focus on renewable energy and open access power markets.The electricity derivatives are expected to serve as a vital bridge between the physical and financial sectors.The MCX currently offers contracts related to base metals -- zinc, aluminium, copper and lead, bullion (gold and silver), energy (oil and natural gas) and mentha oil.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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