Mumbai, June 6 -- The Multi Commodity Exchange of India (MCX) has received approval from the Securities and Exchange Board of India (Sebi) to launch electricity derivatives, according to a regulatory filing on the BSE.

These contracts-linked to the price of electricity-will allow power generators, distribution companies, and large consumers to hedge against price volatility and manage risks more effectively. "The electricity derivatives contracts will enhance efficiency in the power market," MCX said in its filing.

The launch marks the resolution of a long-standing jurisdictional tussle over the regulation of electricity derivatives. The matter has been pending since the days of the now-defunct Forward Markets Commission (FMC), which wa...