Revision of proprietary position limits of non-bank stock brokers for currency derivatives contracts
Summary
This circular revises the proprietary position limits for non-bank stock brokers in currency derivatives contracts based on market feedback. It clarifies that existing total limits apply to both proprietary and client positions, while redefining specific proprietary open position limits using a higher-of formula. Stock Exchanges and Clearing Corporations are directed to implement these changes and report back to SEBI.
Text
Position limits stated at para 12.(a) of SEBI circular CIR/MRD/DP/20/2014 dated June 20, 2014 shall be the total limits available to the stock brokers for taking positions on proprietary basis and for positions of their clients.
Proprietary open position limits of a stock broker, who is not a bank, across all contracts in a permitted currency pair shall be higher of (a) 15% of the total open interest in the currency pair, or (b) USD 50 million / EUR 25 million / GBP 25 million / JPY 1000 million, as applicable.
take necessary steps to put in place systems for implementation of this circular, including necessary amendments to the relevant bye-laws, rules and regulations;
bring the provisions of this circular to the notice of the stock brokers / clearing members and also disseminate the same on their website;
communicate to SEBI the status of implementation of the provisions of this circular.
This circular is being 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 — Revision of proprietary position limits of non-bank stock brokers for currency derivatives contracts. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.