SC: General Reference to a Tender’s Arbitration Clause Does Not Incorporate it into a Contract  ||  Supreme Court: Partnership Veil May be Lifted to Detect Illegal Sub-Letting Arrangements  ||  Supreme Court: Lower Dearness Relief For Pensioners than Employees' DA is Arbitrary under Article 14  ||  Supreme Court: NCLT Should Not Assess Merits of Pre-Existing Dispute in Section 9 Applications  ||  Supreme Court Clarifies that the Right to Vote is Not a Fundamental Right But a Statutory Right  ||  Chhattisgarh High Court: Minor’s Voluntary Elopement With a Lover Does Not Constitute Kidnapping  ||  Bombay HC: Staring at Co-Worker’s Chest is Morally Wrong But Does Not Amount to Voyeurism under IPC  ||  Delhi HC: Loss of Confidence in Employees Entrusted With Funds is Valid Ground For Termination  ||  Allahabad High Court: Gram Nyayalaya Has Jurisdiction to Decide Maintenance and Execution Petitions  ||  J&K&L HC: Non-Publication of Sec 4(1) Notice in Gazette and Local Newspapers Vitiates Acquisition    

Pre-Expiry Margin on commodities under Alternate Risk Management Framework- (Securities and Exchange Board of India) (23 Feb 2021)

MANU/SDER/0003/2021

Capital Market

1. SEBI vide Circular CIR/CDMRD/DRMP/01/2015 dated October 01, 2015 and SEBI/HO/CDMRD/DNPMP/CIR/P/2019/83 dated July 26, 2019, inter alia, had prescribed norms related to Pre-Expiry Margins.

2. In light of an unprecedented event of negative final settlement price in the crude oil futures markets in the recent past, SEBI vide circular SEBI/HO/CDMRD/DRMP/ CIR/P/2020/176 dated September 21, 2020 had prescribed an Alternate Risk Management Framework (ARMF) that would be applicable in case of near zero and / or negative prices for any underlying commodities/futures. Pursuant to clause 3.2 of the aforesaid circular, Clearing Corporations had to identify commodities susceptible to the possibility of near zero and negative prices

3. The matter of negative crude oil price event was deliberated upon in the Risk Management Review Committee (RMRC) of SEBI. In this regard, one of the suggestions of RMRC was that Indian Exchanges should consider introducing some mechanism to encourage significant reduction of Open Interest as the contract approaches the expiry date.

4. In line with the recommendations of the RMRC, it has been decided in consultation with Clearing Corporations that pre-expiry margins shall be imposed on cash settled contracts wherein the underlying commodity is deemed susceptible to possibility of near zero and/or negative prices as identified by exchange/CC under ARMF circular. In case of these contracts, pre-expiry margins shall be levied during the last five trading days prior to expiry date, wherein they shall increase by 5% every day.

5. The circular shall be effective from the first trading day of the month of April 01, 2021.

6. This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Tags : PRE-EXPIRY MARGIN   COMMODITIES  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved