``Derivatives trading is new to India and a deluge of indices could confuse traders resulting in chaos. Initially, NSE would allow members to trade on S&P Nifty and would observe the response,'' India Index Services and Products (IISP) member Ravi Mohan told PTI.

NSE's Nifty comprises of 50 of the top companies that are actively traded and have large floating stock on the bourse.

Trading in derivatives will begin in the country after Parliament approves amendment in Securities Contracts Regulation Act (SCRA), to treat indices as securities.

A bill to amend the SCRA is expected to come up for discussion in the winter session of Parliament.

The country's other leading bourse Bombay Stock Exchange (BSE) is also gearing up for trading on its widely accepted BSE Sensex.

Mohan, who is also managing director of Crisil, said that the NSE would gradually allow trading on its other market indices including S&P CNX 500, CNX Midcap 200 and NSE 100 after the members and the market get familiar with derivatives.

IISP is in charge of designing and modifying the various indices of NSE and it would replace scrips with others based on market activity of various companies on the exchange.

Mohan said IISP would update the indices from time-to-time so that they reflect market movements on a given day correctly.

``We are in the process of updating the indices so that scrips that become less active in a certain industry are replaced with another from the same industry,'' he said.

NSE and Crisil hold equal stake in the joint venture IISP while S&P would bring in their expertise and knowhow.