Revision in Position Limits for Agricultural Commodities
Summary
This circular revises position limits for agricultural commodity futures contracts effective March 1, 2016. It discontinues the previous client-level position limit equal to 5% of market-wide open interest and establishes new calculation methodologies for overall and near-month positions. Exchanges are directed to amend their bye-laws and report implementation status to SEBI.
Text
Overall position limit for a particular commodity shall be restricted to numerical position limits as mandated from time to time. Client level position limit equal to 5% of market wide open interest permitted earlier, is hereby discontinued.
Near month position limit for a particular commodity shall be restricted to one-fourth of the client level overall position limit in that commodity.
For the purpose of calculating overall position, all long and short positions of the client across all contracts on the underlying will be added up separately and higher of the two shall be considered as overall open position.
For calculating near month open position, higher of long and short positions of the client in near month contracts to be considered.
Netting out near month contract with off-setting positions in far months contracts shall not be permitted for the purpose of computation of near month position of any client.
Overall position limit for a particular commodity shall be the numerical position limits as mandated from time to time or 15% of market wide open interest, whichever is higher.
Near month position limit for a particular commodity shall be one-fourth of the member's overall position limit in that commodity.
The position of the clients as determined in (I)c above will be added without netting off among themselves as also against proprietary position of the member. All longs and shorts will be added up separately and higher of the two will be reckoned.
The position of the clients as determined in (I)d above will be added without netting off among themselves as also against proprietary position of the member. All longs and shorts will be added up separately and higher of the two will be reckoned.
Position limits for member’s proprietary positions shall be same as client level position limits.
The above provisions shall be effective from March 01, 2016 onwards.
Bring the provisions of this circular to the notice of the members of the Exchange and also to disseminate the same on their website.
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Source: SecMarx — Revision in Position Limits for Agricultural Commodities. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.