Product Advisory Committee
Summary
SEBI mandates that recognized stock exchanges with commodity derivatives segments constitute a Product Advisory Committee (PAC) for each commodity group. The PAC must include balanced stakeholder representation and meet at least twice annually to advise on contract design, delivery centers, and market conditions. Exchanges are required to disclose committee details publicly and ensure annual performance reviews by their Regulatory Oversight Committees.
Text
each recognised stock exchange dealing in commodity derivatives segment shall constitute a Product Advisory Committee (PAC) for each group/complex of commodities having common stakeholders/value chain participants
The PAC shall be consulted for the following: Contract design on new commodities and review of design of existing contracts... Discussion on the “State of the Markets for the commodity”... Review of the delivery centres... Review of suggestions/feedback/complaints... Performance review of the existing contracts
Exchange shall have the right to accept, reject or modify any recommendations made to it by the PAC, by recording the reasons thereof
The PAC shall have a balanced representation from amongst the following categories of stakeholders: Representatives from Trade Associations... Representatives from various Stakeholders... Representative(s) from warehousing/ assaying sector... Independent Expert(s)... Representative(s) from financial sector... Representative(s) from Exchange/ clearing corporation
Each PAC meeting shall be headed by a Chairman (who shall be an independent person with experience in the specific commodity)... PAC shall have an exchange executive as Vice Chairman for administrative coordination/decision
The PAC shall meet at least twice a year and more frequently as and when required
In the PAC meetings at least 50% members (excluding representative from exchange/Clearing Corporation) shall be present, including its chairman or vice chairman
For each PAC, the exchange shall make following disclosures on its website: Composition of Committee- Name of the member, Organisation, Sector; Terms and reference of the Committee
PAC members must ensure that... all matters discussed and all materials and data made available to them in respect of their Committee-related activities are kept confidential at all times
If there is a conflict of interest arising for a member... such committee member must absent himself from discussion on that matter and the minutes of the meeting must record the same
There should be an annual review of the PAC’s performance by the Regulatory Oversight Committee of the Stock Exchange
Exchanges are advised to: i. to make necessary amendments to the relevant bye-laws, rules and regulations. ii. bring the provisions of this circular to the notice of the stock brokers... iii. communicate to SEBI, the status of the implementation
Source: SecMarx — Product Advisory Committee. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.