The stock market regulator, Securities and Exchange Board of India (Sebi), on Tuesday approved in principle the introduction of futures on individual stocks.

Initially, it will be in 31 scrips in which individual stock options are permitted.

This decision was taken at Sebi's board meeting in Mumbai.

The advisory committee on derivatives has been asked to work out the details for its introduction, including the time-frame and infrastructure.

The final approval for its introduction would be given by the Sebi board shortly on receipt of the recommendations of the advisory committee.

The advisory committee has also been asked to specify the risk containment measures, including cash settlement.

To curb the misuse of participatory notes by foreign institutional investors (FIIs), the board approved the proposal regarding disclosure of the fact of issue of offshore derivatives.

The board has decided to rationalise the fee structure for option contracts and it would be calculated on the premium traded.

In cases where options are exercised or settled, the turnover fee shall be calculated on the notional value of the option contract.

The board also approved the introduction of a new class of trading-cum-clearing member who could settle and clear trades on his behalf as well as his clients.

The net worth requirement for this new class shall be Rs 1 crore without any other change in risk containment measures as against the current requirement of Rs 3 crore.