A meeting of the derivative stock exchanges was convened to identify the measures to be taken up for encouraging higher volumes and liquidity on the derivatives market. The Group was of the view that the investor education should be intensified. It was therefore decided that focused programme on investor education would be conducted jointly by SEBI, NSE and BSE in the four metros to begin with. It was also noted that institutional investors are not active in the derivatives market and a meeting will be convened to identify the issues if any. 

It was decided to set up an Advisory Group under the Chairmanship of Prof. J. R. Varma. The Advisory Group would consider the issues concerning the growth, development and regulation of the derivative market. The Group would consist the persons from stock exchanges, broking community, institutions, professionals, mutual funds and academicians. A sub-Group of the Advisory Group would be constituted to suggest uniform mechanism for adjustment in the option contracts at the time of corporate actions. 

The Group was also of the view that the physical settlement of the option should commence as quickly as possible as this would help integrating both cash and derivatives market, better price discovery and higher volumes. The physical settlement was originally proposed to commence after a period of six months of the introduction of the stock options. 

The subsidiaries of the stock exchanges are being permitted to become clearing as well as trading members in the derivatives market and all the risk parameters as laid down by SEBI would be applicable to the trades of these subsidiaries. This would enable the members of the small stock exchanges to participate in the derivatives market through the subsidiary route and would also provide wider access to the investors also.

The Group was also of the view that introduction of the stock futures could help in development of derivatives market, however, this issue needs to be examined in greater detail by the Advisory Group and approved by the Board of SEBI before any decision is being taken in this regard.

The members of the newly formed association of brokers had agreed to furnish the details of practical difficulties faced by the members in the derivatives market. So far, such details have not been received by SEBI, however, on receipt, the same would be considered by the Advisory Group.

Further it was agreed that the reporting of the trades and open positions by the exchange shall be on uniform pattern so that it does not generate any confusion in the market.