Modifications in the contract specifications of commodity derivatives contracts
Summary
SEBI has categorized modifications to commodity derivatives contract specifications into three distinct categories based on materiality and approval requirements. Category A permits non-material changes at the exchange level, while Category B requires post-facto regulatory oversight committee approval for specific material changes in contracts with nil open interest. Category C mandates prior SEBI approval for significant material modifications, subject to deliberations by advisory committees.
Text
decided to categorise the modifications in contract specification parameters in the following three categories: a. Category A: Non-material modifications... b. Category B: Material modifications... c. Category C: Material modifications...
Non-material modifications which can be made at the exchange level in yet to be launched and running contracts.
Material modifications which can be made at the exchange level in yet to be launched contracts or running contracts which have nil open interest. These modifications shall require approval from Product Advisory Committee and approval of Regulatory Oversight Committee to be obtained post facto.
Material modifications which can be made only after approval from SEBI. These modifications shall require deliberations and approval from Product Advisory Committee and Regulatory Oversight Committee before seeking permission from SEBI.
before introduction of any modification in contract specifications the Exchanges shall inform SEBI and market participants along with reasons for the modifications as per the timeline mentioned in Annexure I.
The provisions of this circular shall be effective from December 01, 2019.
This Circular is issued in exercise of powers conferred under Section 11(1) of Securities and Exchange Board of India Act, 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956.
Source: SecMarx — Modifications in the contract specifications of commodity derivatives contracts. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.