Indian regulators halt stock derivatives business of two exchanges, requiring priority development of stock trading
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According to sources, the Securities and Exchange Board of India has prohibited the National Commodity & Derivatives Exchange and the Metropolitan Stock Exchange of India from conducting equity derivatives trading, and has required both institutions to prioritize the development of their equity spot businesses. This move reflects the regulator’s cautious stance towards India’s rapidly expanding derivatives market—currently, the size of the country’s derivatives market is about twice that of the spot market, far exceeding the typical 2%-3% ratio seen in major global markets. Previously, both exchanges had submitted applications to the regulator, planning to expand their equity spot and derivatives businesses in order to diversify their existing operations, which are primarily focused on agricultural products and currency derivatives.
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