SC: Suit Alleging Coercion or Undue Influence Cannot be Rejected under Order VII Rule 11 CPC  ||  Cal HC: Once ED Attachment is Confirmed, Challenge Becomes Academic; PMLA Remedy Must be Pursued  ||  MP HC: Pen-Drive Evidence Cannot be Introduced At a Late Trial Stage Without Proof or Relevance  ||  Calcutta HC: Employee Can't be Stopped From Joining Rival Post-Resignation; Trade Secrets Protected  ||  Calcutta HC: Banks Must Provide Forensic Audit Report Before Calling an Account Fraudulent  ||  Del HC: Woman Cannot Demand Re-Entry to Abandoned Matrimonial Home if Alternate Accommodation Exists  ||  Calcutta HC: Land Acquisition For Industrial Park is Public Purpose; Leasing to Industry is Valid  ||  Patna HC: PwD Recruitment Must Comply With RPwD Act; Executive Resolutions Cannot Override the Law  ||  Madras HC: Individuals Facing Criminal Trial Must Get Court Permission Even to Renew Passports  ||  Calcutta HC: Demolition Orders Cannot be Challenged under Article 226 if a Statutory Appeal Exists    

Options on commodity futures - product design and risk management- (Securities and Exchange Board of India) (03 Jan 2022)

MANU/SDER/0001/2022

Capital Market

1. SEBI vide Circular no. SEBI/HO/CDMRD/DMP/CIR/P/2017/55 dated June 13, 2017, permitted Commodity Derivatives Exchanges to introduce trading in Options on Commodity Futures and stipulated guidelines with regard to the product design and risk management framework to be adopted for trading in options on commodity futures.

2. Based on feedback received from Stock Exchanges and the recommendations of Commodity Derivatives Advisory Committee of SEBI, it has been decided to make changes in the Exercise Mechanism of option contracts on commodity futures. Accordingly, the existing para 5 of Annexure 1 to the Circular dated June 13, 2017 stand deleted. The following new para 5 shall be incorporated in place of the deleted para:

"5. Exercise Mechanism:

On expiry, following mechanism shall be adopted by Exchanges for exercise of the options contracts:

5.1. All In the money (ITM) option contracts shall be exercised automatically, unless 'contrary instruction' has been given by long position holders of such contracts for not doing so.

5.2. All Out of the money (OTM) option contracts shall expire worthless.

5.3. All exercised contracts within an option series shall be assigned to short positions in that series in a fair and non-preferential manner."

3. Other guidelines prescribed in aforesaid SEBI Circular dated June 13, 2017 shall remain unchanged

4. The Circular shall be effective from the date of new series of commodity derivatives launched on or after February 1, 2022 and exercise mechanism for Options on Futures referred to in any other guidelines prescribed by SEBI shall be as per the instant Circular.

5. The Exchanges are advised to:

i. take steps to make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the same,

ii. bring the provisions of this circular to the notice of the members of the Exchange and also to disseminate the same on their website,

iii. communicate to SEBI, the status of the implementation of the provisions of this circular.

6. This circular is issued in exercise of 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 : OPTIONS   COMMODITY FUTURES   RISK MANAGEMENT  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved