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Department of Commerce UGC SAP

(School of Management),
Pondicherry University, Pondicherry, India

International Conference on Financial Derivatives
17, 18 &19 December, 2010

(Thrust Areas: Commodity & Equity Derivatives)

Call for Papers & Participants

Last date for submission of abstract : 10th November, 2010
Last date for submission of full paper : 30th November 2010.

We are happy to inform you that the Department of Commerce, School of
Management, Pondicherry University is organizing a three days International Conference
on “Global Commodity Derivatives Market: The Road Ahead”. We believe the
intellectual dialogue on Global Commodity Derivatives Market is important in the
present state of global economy and are therefore creating an opportunity for the
stakeholders, academicians and researchers on the Commodity Market to deliberate and
discuss the developments in the field, which is deserving much importance. Hence we
request the interested academicians, stakeholders and economists to make their
intellectual contribution, in any of the themes and sub-themes of the conference
mentioned hereunder, through submission of papers in the conference.

Pondicherry University:

The Pondicherry University was established in 1985 by the Government of India
through an Act of Parliament. It is an outstanding institution among Central Universities
in India, with teaching and research as primary functions. The University has several
unique features such as to dissemination and promotion of knowledge by providing
instructional and research facilities. The campus is located in a sprawling area spread
over seven hundred and eighty acres of land facing Bay of Bengal. The University is a
member of the Association of Commonwealth Universities and has signed MOU with

this mechanism dampens the peaks and lifts up the valleys i. Continuous research activities are also going on in the department in the above areas. Having entered into an export contract. (ii) Leads to integrated price structure throughout the country. the amplititude of price variation is reduced. Foreign Trade. to carry out research in the field of “Derivatives and Risk Management” for 5 years and several of the faculty members of the department have undertaken minor and major projects assisted by UGC. (v) Encourages competition and acts as a price barometer to farmers and other trade functionaries. The futures trading is very useful to the exporters as it provides an advance indication of the price likely to prevail and thereby help the exporter in quoting a realistic price and thereby secure export contract in a competitive market. Department of Commerce The Department is presently assisted by the UGC at DRS-I level of SAP.Phil & Ph. (iv) Helps balance in supply and demand position throughout the year.e. The curriculum of the department is attracting the attention of companies which are involved in Banking. Stock Broking and Forex Dealings. It is useful to all segments of economy. Other benefits of futures trading are: (i) Price stabilization-in times of violent price fluctuations . Capital Market. It is a constituent of the School of Management. Economic Benefits of the Derivative Trading in Commodities and its Prospects: Futures contracts perform two important functions of price discovery and risk management with reference to the given commodity.several foreign Universities and Institutions.Com (Business Finance). The Department offers M. It is useful to producer because he can get an idea of the price likely to prevail at a future point of time and therefore can decide between various competing commodities. which is one of the popular Schools of Excellence in the Campus primarily focusing in the business related courses since the very inception of the University.D programmes with a total placement focus. (iii) Facilitates lengthy and complex. A recent survey report by the UGC and the NAAC has ranked the institution as one of the best in the country. It enables the consumer to get an idea of the price at which the commodity would be available at a future point of time. He can do proper costing and also cover his purchases by making forward contracts. the best that suits him. production and manufacturing activities. M. it enables him to hedge his risk by operating in futures market. .

With the gradual withdrawal of the government from various sectors in the post-liberalization era. Notably. They are: a. This can be attributed to multiple reasons like increased number of commodities available for trading. The volume of trade in the Indian Commodities Market is increasing year after year and at the same time there is continuous uproar in the country on the very idea of derivatives trading in commodities and its negative implication on the society. During shortages.6 lakh crore) during 2009-10 up 47. Limit on open position of an individual operator to prevent over trading. b. Minimum/maximum prices to be prescribed to prevent future prices from falling below the levels that are un remunerative and from rising above the levels not warranted by genuine supply and demand factors. In order to safeguard against uncontrolled speculation certain regulatory measures are introduced from time to time. Forward Market Commission. Special margin deposits to be collected on outstanding purchases or sales to curb excessive speculative activity through financial restraints. d. closing the markets for a specified period and even closing out the contract to overcome emergency situations are taken. c. the need has been felt that various operators in the commodities market be provided with a mechanism to hedge and transfer their risks. and diversified services from the commodity exchanges. Limit on price fluctuation (daily/weekly) to prevent abrupt upswing or downswing in prices. since the commencement of trading in this segment through online national commodity exchanges in late 2003.49% since 2005-06. strategic international alliances.6 trillion (`77. Commodity futures trading in the country recorded a turnover of US$ 1.Futures trading is also capable of being misused by unscrupulous speculators. an agency under Ministry of Consumer Affairs. extreme steps like skipping trading in certain deliveries of the contract. the commodity futures trading registered CAGR of 68. Many researches by the eminent economists have advocated that commodity derivatives will yield good results to the economy in the long run by wiping away its adverse effects to the economy and the society. introduction of new and innovative products aligned to the industry requirements. growing awareness.9% from $1.1 trillion (`52. expanding reach. India's obligation under WTO to open agriculture sector to world trade would require futures trade in a wide variety of primary commodities and their products to enable diverse market functionaries to cope with the price volatility prevailing in the world market. Food & Public . The Indian commodity futures sector has grown by leaps and bounds.4 lakh crores) witnessed a year ago.

However. unlike most other derivatives. fully demutualized and regulated exchanges are leading the growth. global turnover of equity futures and options surged by 103. the second largest gold. strengthen the liquidity and price discovery in underlying equity markets.1 percent. small price moves in cash markets can have an outsized impact on the financial position of participants in these markets.9 to 46. respectively. the futures market volume vis-à-vis the physical market volume in India is still lower compared with markets such as the US. Moreover. in terms of contracts traded in 2009 helping stakeholders develop the ecosystem in a sustainable format. there still lies huge growth potential for the Indian commodity derivatives market. whose relative share in global trading declined from 50. as investors revise their expectations about the cash generating ability of one or more listed firms. Economic Benefits of the Derivative Trading in Equity and its Prospects: Equity derivatives convey benefits similar to other derivatives. and lower the cost of equity listings for firms. Multi Commodity Exchange of India Ltd. Trading of stock index exchange-traded derivatives (ETDs) has taken off in other Asian . China.distribution regulates futures trading in more than 50 commodities undertaken on 4 national and 17 regional commodity exchanges. Equity derivatives are the most liquid among all derivative products in emerging market countries and trading is largely exchange-based rather than over-the-counter (OTC) Countries with formalized.9 and 93. since end-2004. Global trading in equity futures and options at derivatives exchanges more than tripled over the last three years. daily trading amounted to about US$222 billion.4 percent. One of nation’s commodity exchanges. about 87 percent of which is attributable to trading at the Korea Futures Exchange (KOFEX). hence with positive policy initiatives. In 2005. (MCX) emerged as sixth largest commodity futures exchange globally in 2009. Derivatives on single stocks or equity indices reduce uncertainty about expected corporate performance. During the same time. with the combined figure for futures and options having shown explosive growth at an annualized rate of more than 30 percent over the last five years. it also emerged as the world’s largest silver exchange. Despite the strong growth in commodity futures trading. the effective use of derivative markets for risk transfer and price discovery of equity depends critically on the liquidity as well as efficient pricing and sufficient trading volume in underlying cash markets. copper and natural gas exchange and the third largest crude oil exchange. but they also entail sizable risks to be managed. the UK. Measured by notional value. options have become slightly more popular than futures. because derivatives often imply substantial leverage. and Japan.

inadequate understanding of risk management techniques. has mushroomed recently. while global trading measured by the number of traded contracts has grown only marginally by less than 30 percent. sustain and take forward the Derivatives Trading in Commodities and Equities. and credit derivatives). interest rate. In this background. Emerging market regulators recognize the necessary importance of developing derivative markets. Rising stock prices worldwide have led to a doubling of average contract sizes worldwide since 2003. under the UGC SAP on “Derivatives and Risk Management” is organizing this “Conference on Financial Derivatives” to discuss and deliberate on various related issues. equity. which concentrates mostly on options. the scope of this conference has topical appeal from the perspective of market participants and regulators. and prudential regulation and supervision. Equity derivative trading in emerging Asia. But emerging derivative markets also pose important challenges to financial stability. The resulting improvement in allocation of risks has made overall capital markets more efficient. while the availability of derivatives to both limit and leverage risk exposures has increased market capitalization and liquidity in the underlying cash markets. Although trading increased in notional terms. especially in India. particularly in areas where vulnerabilities to changes in risk extend across institutions and national boundaries. turnover measured by the number of contracts was sluggish.countries as well in recent years. the Department of Commerce. the pervading rally in equity prices worldwide transpired into higher-market values of equity derivative contracts. where market liquidity is comparable to that of many exchanges in mature markets. Recently. they remain concerned about potentially excessive risk- taking. Taiwan POC and Singapore. In the light of current efforts by national regulators in the region. However. while acknowledging existing and forthcoming challenges. The main purpose of the conference is to outline key policy considerations in developing derivative markets. Financial globalization facilitates greater diversification of investment and enables risk to be transferred across national financial systems through derivatives. equity derivatives have flourished on Asia's exchanges and have witnessed the most rapid growth of all traded derivative products (foreign exchange. market practices. . particularly in the context of rapid evolution of products. it is felt that there is a necessity to formulate appropriate strategies to support. In general. to implement comprehensive guidelines on derivatives. most of the growth of equity derivative trading is due to valuation effects caused by rising stock prices (which might have been even higher if equity yields would have experienced spread compression similar to fixed income instruments over the last two years). such as the Reserve Bank of India. which largely explains the significantly larger contract sizes over the last years. Taking a step in this direction. commodities. and limited supervisory capacity. This conference will review the recent development of equity derivative markets in emerging Asia and inform a normative debate about the role of economic conditions.

Emerging out of Financial Crisis: Lessons for Performance and Regulation of Commodity/Equity Derivatives Markets 2. Regional developments of Commodity / Equity Derivatives Market 18. Role of options in price risk management for farmer/producers. Effects and Remedies. including use of equity derivatives in mergers and acquisitions 19. Asian market resurgence: Will Asia become the price setters for commodities/equities? 3. Framework for regulation of inter-connected financial markets 15. Effect of commodity Futures on real economy – Modes of price transmission and stakeholder responses – Developed Vs Developing Countries 9. Will bringing OTC to clearing platforms and later to exchange platforms help streamline the process of price discovery on their platforms? 11. Is the price setting power reverting to Asian Markets? 6. 12. Participant objectives in commodity derivative markets Vs Efficient Price Discovery – Do commodity derivatives warrant participation restrictions? 8. Problems in price convergence in agricultural commodities – Causes. Strategies for Increasing Derivative Trading Profits . corporate and institutions. Role and Benefits of Financial Institutions and Banks on Commodity Derivative Markets and their Price Discovery Process 14. Global Regulatory Framework in Commodity/Equity Futures – Moving Towards Convergence or Divergence? 10.Themes for papers on Global Perspective: Commodity & Equity Derivatives 1.Focusing On Futures & Option 20. Impact of Asian Economic Resurgence on Global Commodity / Equity Derivative Markets 5. New innovations in equity derivatives products. 7. Cause and effect of index funds on the price discovery process of commodity derivative markets 13. Trends in Commodity / Equity Derivatives and Structured Products 17. Pricing Methodologies for Equity / Commodity Derivatives 16. Liquidity requirements in Commodity / Equity Derivatives (The Themes stated above are only indicative of expected research papers and papers beyond the themes stated above will also be taken for consideration provided they deal with contemporary issues in Financial Derivatives Market and impart new dimension in research in the area of Financial Derivatives and Risk Management) . Role of technology: Is regulation ahead of the curve? 4.

velmuruganps@hotmail. Two copies of the full paper. national and international participants comprising of Students. Paper submitted after this deadline will not be considered for the Conference. Exchanges. Publication and Award: Outstanding research contributions will be awarded prize at the Conference and only selected papers will be taken up for publication. Exchange Members and Brokers and other Special Interest groups.Role and Economic Significance of Products and Participants Submission of Papers The last date for submission of abstract submission is 10th November.For Whom? The conference will be open to local. (one hard copy and one soft copy) not exceeding 20 pages should be submitted in A4 size. MS Word format. Farmers. 2010.Velmurugan. Regulators. Objective of the Conference The Objectives for the conference shall be: A) Learning Lessons from the International Equity/Commodity Markets & Current Financial Crisis B) Sharing best practices in International Equity/Commodity Derivative Market places and platforms C) Analyzing the performance of Indian Equity/Commodity Futures Markets Vis a Vis International Equity/Commodity Futures Markets D) Identifying the impact of Inflation and Leveraged Trading in Commodity Derivative Markets E) Future Potentials of Indian Equity/Commodity Markets .com.5 line spacing.PS at velmuruganps@yahoo. Academicians. . Farmers Associations. Times New Roman Font with heading in Font size 14 and the remaining text of the font size 12 with 1. so as to reach the organizers in time. regional. Researchers. Abstract should be between 150-200 words. Equity/Commodity Market Participants and Stakeholders.com The last date for submission of full paper is 30th November 2010. should be sent in electronic format (word document) to Dr.

Mallikarjunappa.Malabika Deo. UGC-SAP Dept of Commerce”.Samson Moharana. Utkal University.Participation fees: (for Workshop and Seminar) For Participants from India (excl. Director.Jessiah Selvam.100 (DD towards Delegate / Participation fees to be drawn in favour of “Coordinator.S.Natarajan.Shanmugasundaram.1000 For Academicians.Shunmugam.Bhanumurthy. without any extra charges. For participants from other countries. Dean.K. Mumbai Dr. Reader. Delhi University South Campus Prof. at the request of interested participants with an additional cost of Rs. Dept of Commerce. Mangalore University Dr. Head.V. School of Management. Regarding the accommodation facilities for the participants.Tareen.Ramdass.ofCommerce. Chief Economist. the accommodation will be provided at the University Guest House itself. IASMS. Pondicherry University Chairman: Prof.Lazar.D. Pondicherry University Dr. students and research scholars) Rs. The organizers will be obliged to make advance room bookings. Pondicherry University . Academicians.M. Bhubaneshwar.500 per day at Pondicherry. Dept of Commerce. Experts Associated with the Conference Prof. academicians.P.Loganathan. Reader. IIT. Kharagpur Organising Committee: Patron: Padmashree Prof. Pondicherry University Executive Members: Prof.A.Prabina Rajib. Research Scholars & Students Outside India USD. India Accomodation & Transport Facilities: The participation fees will cover food and conference materials. Payable at Puducherry. Dept of Commerce.V. MCX Ltd. the organizers make a list of affordable hotels where the accommodation can be availed at the expense of participants. Transport facilities to and from the place of stay at Pondicherry will be provided by the organizers. Pondicherry University Prof. Research Scholars and Students from India Rs. Bangalore. Pondicherry University Dr.K.500 For Participants. Prof. Registrar.J. Dept. Prof. Vice-Chancellor Shri.

K. Dy-Coordinator.Palanichamy. Professor.com velmuruganps@hotmail. Dept of Commerce Department Contact Details: Mrs.Velmurugan. Assistant Phone: 0413-2654368 Contact Details for Mailing Research Papers and Communication Prof.Nagar. UGC SAP DRS-I.V. Conference Coordinators: Prof.Palanichamy Dr.B. UGC SAP DRS-I. Pondicherry University Dr. Dept of Commerce Dr. Kalapet. Pondicherry University.Lecturer.com Palani1948@rediffmail. Dept. Office Manager & Mr.Savithri.P. Dy. Coordinator.PS. Dept of Commerce. Asst. of Commerce.Ammaiyappan.S.Gr.Shri.Aravanan. Sr. UGC SAP DRS-I. Professor. Asst.Coordinator. Pondicherry University Pondicherry 605014 Pondicherry 605014 Phone: 0413-2654368 (Direct) Mobile: 9944115566 Mobile: 9626194536 velmuruganps@yahoo.com .Nitheesh.Shijin. Coordinator.PS. UGC SAP DRS-I Dept of Commerce Dept of Commerce School of Management School of Management Pondicherry University Dept of Commerce R. Pondicherry University Shri. Dept of Commerce. Velmurugan.P.