Modifications in the contract specifications of commodity derivatives contracts- (Securities and Exchange Board of India) (14 Nov 2019)
MANU/SDER/0011/2019
Capital Market
1. SEBI vide its circular ref. no. SEBI/HO/CDMRD/CIR/2016/88 dated September 20, 2016 had inter-alia prescribed at Para 3(c) provisions regarding permission to allow modifications in contract specifications at the exchange level.
2. In order to streamline the process and after consultation with the exchanges, it has been decided to categorise the modifications in contract specification parameters in the following three categories:
a. Category A: Non-material modifications which can be made at the exchange level in yet to be launched and running contracts.
b. Category B: Material modifications which can be made at the exchange level in yet to be launched contracts or running contracts which have nil open interest. These modifications shall require approval from Product Advisory Committee and approval of Regulatory Oversight Committee to be obtained post facto.
c. Category C: Material modifications which can be made only after approval from SEBI. These modifications shall require deliberations and approval from Product Advisory Committee and Regulatory Oversight Committee before seeking permission from SEBI.
3. The list of various contract specification parameters as per the above stated categories along with the timelines for advance intimation of modification to SEBI and market participant is given at Annexure I.
4. The permission to modify contract specification parameters of commodity derivatives contracts is subject to the condition that before introduction of any modification in contract specifications the Exchanges shall inform SEBI and market participants along with reasons for the modifications as per the timeline mentioned in Annexure I. However, this shall not apply to certain modifications which are required to be effected immediately considering the exigencies of the situation as per surveillance measure.
5. The Circular ref. no. SEBI/HO/CDMRD/CIR/2016/88 dated September 20, 2016 stands amended to this effect.
6. The provisions of this circular shall be effective from December 01, 2019.
7. This Circular is issued in exercise of powers conferred under Section 11(1) of Securities and Exchange Board of India Act, 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Tags : MODIFICATIONS CONTRACT SPECIFICATIONS DERIVATIVES CONTRACTS
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