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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Legal and Regulatory Environment

Under the SEBI framework for equity derivatives in India, which of the following is the regulator that grants recognition to a stock exchange to start trading in derivatives contracts?

SEBI is the regulator that oversees stock exchanges and approves their introduction of equity derivatives contracts. The RBI deals with banking and currency matters, and a clearing corporation operates under SEBI norms, so it cannot grant recognition to an exchange.

  1. AReserve Bank of India
  2. BSecurities and Exchange Board of IndiaCorrect
  3. CMinistry of Corporate Affairs
  4. DClearing Corporation of the exchange itself

Explanation

Under the Securities Contracts (Regulation) Act framework, recognition of stock exchanges and the approval of derivatives contracts on them is overseen by SEBI. RBI regulates banks and currency matters, not equity derivatives. A clearing corporation works under SEBI norms and cannot approve exchanges.

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