Concept and Nature of Future Contracts

Future and forward contracts are regarded as a case of financial derivative instruments the public offering of which on a limited level in Iranian capital market, has recently come to commence by virtue of clause 11 of article 1 of Iran’s Securities Market Act 1384. This article, by the lack of any legal definition of the contracts and for making law community familiar with such new financial instruments, seeks to explain the structure of future contracts in capital market, while describing the characteristics that distinguish them from forward contract. Moreover, the explanation of subject-matter of future contracts, how to terminate the contracts and how to exit the futures market and legal grounds of validity of such contracts shall constitute the discussions of this article.