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MCX, IEX ink licensing agreement to launch electricity derivatives

MCX, IEX ink licensing agreement to launch electricity derivatives

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The launch of electricity derivatives will provide an effective risk management avenue and help the value chain participants to hedge price risks and protect their revenue margins, it said

Mumbai: The Multi-Commodity Exchange of India (MCX) on Thursday said it has entered into a licensing agreement with Indian Energy Exchange 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 the concerned regulators.

“This shall lay the groundwork for a vibrant electricity derivatives market in the country. The launch of electricity derivatives shall provide an effective risk management avenue and help the value chain participants to hedge price risks and protect their revenue margins,” MCX said in a statement.

The launch of electricity derivatives will provide an effective risk management avenue and help the value chain participants to hedge price risks and protect their revenue margins, it said.

With this India will also join a select group of developed countries which offer electricity derivatives on an exchange platform, the statement added.

Source: PTI
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Anand Gupta Editor - EQ Int'l Media Network
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