Master Circular for Commodity Derivatives Market
Summary
This section introduces the SEBI Master Circular for the Commodity Derivatives Market, compiling previous circulars issued by the CDMRD. It establishes that in case of inconsistency, the original circular's content prevails over this compilation. The text concludes with a table of contents outlining chapters on governance, trading, warehousing, risk management, and delivery. This section outlines the governance, administration, and compliance timelines for commodity derivatives exchanges and clearing corporations. It mandates the separation of clearing functions into a distinct corporation within three years and establishes net worth requirements of INR 100 crores. Additionally, it specifies ownership limits, governance structures including Public Interest Directors, and regulatory fee obligations. This section mandates that new board appointments for national commodity derivatives exchanges follow SECC Regulations and requires compliance with Regulation 27. It outlines specific governance obligations, including the segregation of regulatory departments, establishment of oversight and advisory committees, and appointment of a compliance officer. Additionally, it details disclosure
Text
Securities and Exchange Board of India (SEBI) has been issuing various circulars/directions from time to time for commodity derivatives market.
This Master Circular is a compilation of the circulars issued by Commodity Derivatives Market Regulation Department (CDMRD) pertaining to domestic commodity derivatives segment, which are issued till the date of this circular.
In case of any inconsistency between the Master Circular and the original applicable circular, the content of the original circular shall prevail.
This circular is available on SEBI Website at www.sebi.gov.in .
Commodity derivatives exchanges shall comply with the provisions of SCRA, applicable provisions of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, (‘SECC Regulations’) and SEBI circular CIR/MRD/DSA/33/2012 dated December 13, 2012, on procedural norms on recognition, ownership and Governance for Stock Exchanges and Clearing Corporation (‘SECC Circular’).
The timelines prescribed herein, for compliance with various provisions of Securities Laws shall be reckoned from September 28, 2015.
Commodity derivatives exchanges shall transfer the functions of clearing and settlement of trade to a separate clearing corporation within three years. Till then, the exchanges may continue with the existing arrangement for clearing and settlement of trades.
Validity of recognition of commodity derivatives exchanges under SCRA shall be taken to be the same as the validity of their recognition under FCRA... commodity derivatives exchanges shall immediately put in place adequate surveillance system to monitor positions, prices and volumes etc. so as to ensure market integrity till online real-time surveillance systems are set up and operationalized.
Commodity derivatives exchanges shall pay the regulatory fee in terms of Securities and Exchange Board of India (Regulatory Fee on Stock Exchanges) Regulations, 2006.
Commodity derivative exchanges shall not distribute profits in any manner to its shareholders until the requisite net worth of INR 100 crores is achieved in terms of Regulation 14(4) of SECC Regulations.
Commodity derivatives exchanges shall submit audited net worth certificate from the statutory auditor on an yearly basis by the thirtieth day of September every year for the preceding financial year in terms of Regulation 14(5) of SECC Regulations.
National commodity derivatives exchanges shall comply with the shareholdings limits specified under SECC Regulations, 2012 by May 5, 2019. As per clause 5 of SECC Circular, they shall put in place a monitoring mechanism to ensure compliance with the shareholding restrictions specified in SECC Regulations.
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Source: SecMarx — Master Circular for Commodity Derivatives Market. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.