Disclosure by Exchanges related to Deliverable Supply and Position Limits Calculation for Agricultural Commodity Derivatives
Summary
This circular mandates national commodity derivatives exchanges to jointly determine deliverable supply and position limits for agricultural commodities annually. Exchanges must disseminate specific data regarding supply, categorization, and limits on their websites by July 31st each year. Revised position limits become effective for running contracts starting September 1st, provided the change exceeds 5% from the previous year.
Text
Every year, for each agricultural commodity that is being traded in the derivatives market, all national commodity derivatives exchanges shall jointly complete the exercise of determination of ‘deliverable supply, categorization/re-categorization of commodities and computation of numerical value of position limits.
Numerical values of position limits for any agricultural commodity shall be revised only if the computation results in a revision in the value by at least 5% compared to previous year's limits.
Exchanges shall, after prior intimation to SEBI, notify such details to the market through their respective websites sufficiently in advance and latest by 31st of July (unless extended by SEBI under exceptional circumstances) of every year and revised limits shall become applicable for all running contracts with effect from 1st of September of every year.
In order to provide necessary information to the stakeholders the Exchanges shall prominently disseminate on their websites the details of five year average deliverable supply, current year deliverable supply, source of data, categorization of the commodity, position limits etc. for each of the commodity traded on their exchange, as per the format given in Annexure to this circular.
The provisions of this circular shall come into effect from the date of this Circular.
The Exchanges are advised to: a) take steps to make necessary amendments, if any, to the relevant bye-laws, rules and regulations for the implementation of the same. b) bring the provisions of this circular to the notice of the members of the Exchange and also to disseminate the same on their website. c) communicate to SEBI, the status of the implementation of the provisions of this circular.
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.
Source: SecMarx — Disclosure by Exchanges related to Deliverable Supply and Position Limits Calculation for Agricultural Commodity Derivatives. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.