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MCX, IEX Sign Licensing Agreement for Electricity Derivatives

The Multi-Commodity Exchange of India (MCX) has entered into a licensing agreement with the Indian Energy Exchange (IEX) to launch electricity derivatives.

 

The derivatives will be linked to IEX spot electricity prices on MCX trading platform.

 

The agreement is subject to necessary approvals from the Central government and concerned regulators. This will lay the groundwork for a vibrant electricity derivatives market in the country.

 

The launch of the electricity derivatives will provide an effective risk management avenue and help value chain participants to hedge price risks and protect their revenue margins. With this, India will also join a select group of developed countries which offer electricity derivatives on an exchange platform.

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