The Securities and Exchange Board of India (Sebi), on Friday, announced the introduction of Index options with longer tenure of up to three years. To this effect, Sebi has passed a circular under the category “Derivatives – Circulars,” said a release on its official website.

To begin with, Sebi has decided to launch long term options on Sensex and Nifty with tenures of upto three years and the options cycle shall be such that the three serial month contracts would continue to exist alongside the following three quarterly months of the cycle March/ June/ September/ December would be available.

After these, five following semi-annual months of the cycle June/ December would be available, so that at any point in time there would be options contract with at least three year tenure available for investors. Also, the risk containment and other measures applicable for existing exchange traded equity Index option contracts shall be extended suitably to long term option contracts on Index.

The Sebi Derivatives Market Review Committee (DMRC) headed by Professor M Rammohan Rao had recommended the introduction of new derivative products in the Indian market, with option contracts on indices and stocks with life/tenure of up to 5 years (60 months) being one of them.