NSE to launch electricity futures contracts on July 14

The NSE announcement comes close on the heels of the exchange announcing a liquidity enhancement scheme for driving liquidity in the new segment.

The National Stock Exchange will launch electricity futures contract from July 14, as per a circular issued by the exchange.

“Exchange is pleased to inform members that with reference to approval received from SEBI for Monthly Electricity Futures and the same shall be made available for trading in Commodity Derivatives segment with effect from July 14, 2025,” stated the NSE circular.

In terms of the tenure of the contracts, the expiry will be in August, September and October. In other words, the tenure would be one month, two months and three months.

The NSE announcement comes close on the heels of the exchange announcing a liquidity enhancement scheme for driving liquidity in the new segment.

“NSE is now pleased to introduce LES in Electricity Futures (Monthly Base Load) with effect from July 11, 2025, to encourage active participation and market development,” stated the exchange in a circular issued last week.

Also Read: Electricity futures can bring down the price of power in the spot market: NSE

In June, NSE had received the regulatory go-ahead for the launch of electricity futures contracts. The exchange is betting big on the segment since power derivatives are among the largest market segments globally.

Electricity futures is a financial contract where participants lock the price of electricity today for a specified month in the future. No actual power is delivered. Any eligible trading member, corporate buyer, generator, trader, or financial institution approved by the Securities and Exchange Board of India (SEBI) can trade in these futures.

Also Read: MC Explains: What are Electricity Futures and how will they impact the power sector?

Meanwhile, as per the NSE circular, trading members interested in providing continuous quotes as Market Makers (MM) will have to register with the exchange. Further, the eligibility criteria includes, among other things, a minimum net worth of Rs 5 crore, no serious disciplinary action against the member in the last year and also an algo registration in the commodity derivatives segment.

“The exchange will appoint two Market Makers (MM1 & MM2) for Electricity Futures contract based on a competitive bidding procedure. The successful bidder shall be appointed as MM for a period of 6 months from the date of launch of LES on Electricity Futures,” stated the circular while adding that a trading member can apply to be a designated market maker only under one category – MM1 or MM2.

In terms of incentives, Market Maker 1 will be eligible for a monthly incentive of Rs 85 lakh while Market Maker 2 will get a monthly incentive of Rs 45 lakh subject to all quoting conditions being met.