Revised Position Limits for Exchange Traded Currency Derivatives
Summary
The circular modifies previous regulations to curtail position limits and increase margin requirements for Exchange Traded Currency Derivatives. It mandates a 100% increase in initial and extreme loss margins for USD-INR contracts due to recent market volatility. Specific caps are imposed on client and non-bank trading member positions relative to total open interest.
Text
This is in partial modification of SEBI Circular No. SEBI/DNPD/Cir-38/2008 dated August 6, 2008, SEBI/DNPD/Cir-45/2009 dated March 24, 2009, CIR/DNPD/5/2010 dated July 30, 2010 and CIR/DNPD/2/2012 dated May 23, 2012 which, inter-alia, specified the position limits applicable for Client and Trading Member for Exchange Traded Currency Derivatives.
Initial and extreme loss margins shall be increased by 100% of the present rates for USD-INR contracts in Currency Derivatives.
The gross open position of a client across all contracts shall not exceed 6% of the total open interest or 10 million USD, whichever is lower.
The gross open position of a Trading Member, who is not a bank, across all contracts shall not exceed 15% of the total open interest or 50 million USD whichever is lower.
take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant byelaws, rules and regulations;
implement provisions of this circular with effect from July 11, 2013;
bring the provisions of this circular to the notice of the trading members/clearing members and also disseminate the same on its website.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Revised Position Limits for Exchange Traded Currency Derivatives. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.