Physical Settlement of Stock Derivatives
In continuation of SEBI Circular No. SMDRP/DC/CIR- 7/01 dated June 20, 2001 and Circular No. SMDRP/DC/CIR- 10/01 dated November 2, 2001 regarding settlement of stock options and stock futures contracts respectively.
it has been decided to provide flexibility to Stock Exchanges to offer:
- Cash settlement (settlement by payment of differences) for both stock options and stock futures; or
- Physical settlement (settlement by delivery of underlying stock) for both stock options and stock futures; or
- Cash settlement for stock options and physical settlement for stock futures; or
- Physical settlement for stock options and cash settlement for stock futures.
- A Stock Exchange may introduce physical settlement in a phased manner.
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