Position Limits in Interest Rate Derivatives (IRD)
Summary
SEBI has reviewed and revised the position limits for Cash settled Interest Rate Derivatives (IRD) based on consultations with stock exchanges. Banks, Primary Dealers, and specific institutional FPIs are now granted position limits equivalent to Trading Members. The circular establishes new percentage-based and monetary caps for different residual maturity buckets effective immediately.
Text
Banks and Primary Dealers dealing as clients shall have same position limits as are applicable to Trading Members.
Institutions belonging to Category I and II FPIs ... shall have same position limits as are applicable to Trading Members, whereas non-institutions belonging to Category II FPI ... shall have same position limits as are applicable to clients.
Trading members, institutions in Category I and II FPIs ..., banks and Primary Dealers, Mutual Funds (at AMC level), Insurance Companies, Pension Funds and Housing Finance companies: 10% of Open Interest or INR1,200 crore whichever is higher.
Trading members, institutions in Category I and II FPIs ..., banks and Primary Dealers, Mutual Funds (at AMC level), Insurance Companies, Pension Funds and Housing Finance companies: 10% of Open Interest or INR 600 crore whichever is higher.
Non-institutions in Category II FPIs ..., Mutual Fund (Scheme level) and other clients: 3% of Open Interest or INR 400 crore whichever is higher.
Non-institutions in Category II FPIs ..., Mutual Fund (Scheme level) and other clients: 3% of Open Interest or INR 200 crore whichever is higher.
The provisions of this circular shall come into force with immediate effect.
This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956.
Source: SecMarx — Position Limits in Interest Rate Derivatives (IRD). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.