Decisive Scrutiny of Regulatory Framework for Derivatives Products in Indian Stock Market with Special Reference to Single Stock Futures

  • Rajani Bhat Assistant Professor, Post Graduate & Research Department of Commerce, The Cochin College, Kochi, Kerala, India
  • V N Suresh Associate Professor, Post-Graduate Department of Commerce, Maharajas College, Ernakulam, Kerala, India
Keywords: Derivatives Market, Regulatory Framework, Single Stock Futures


The ability of the derivatives market to function as a risk management tool for risk avoiders has resulted in the popularity of the derivative products and, therefore, volatile underlying assets have recorded high trading volumes in the derivative market. A cautious approach was employed by market regulators and the government in the introduction of derivative products, and concerns about extreme market movements and manipulations are addressed as and when such events are detected. Derivatives markets are expected to bring in increased investments to the economic sector in the long run by boosting the confidence of market participants and catering to their risk management needs. Because derivatives markets are expected to provide investors higher overall returns, they are expected to foster the saving habit of market participants and bring about economic growth. Handling innovative products in the market calls for a very secure, dynamic, and sustainable framework of regulatory authorities. When the history of Indian derivative markets is considered, it is seen that The regulatory framework for the derivative trading is as effective as, during the post-global financial crisis period, the recovery of the Indian markets was commendable. The present study undertakes an analysis of the regulatory framework for the derivatives market in the Indian scenario with special reference to single stock futures.

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