In order to streamline the process and after consultation with the exchanges, it has been decided to categorise the modifications in contract specification parameters in the following three categories:
Category A: Non-material modifications which can be made at the exchange level in yet to be launched and running contracts. Category B: 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. Category C: 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.
The list of various contract specification parameters as per the above stated categories along with the timelines for advance intimation of modification to SEBI and market participant is given below.
The permission to modify contract specification parameters of commodity derivatives contracts is subject to the condition that 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 . However, this shall not apply to certain modifications which are required to be effected immediately considering the exigencies of the situation as per surveillance measure.
The provisions shall be effective from December 01, 2019.
Categorisation of contract specification parameters in commodity derivatives contracts
| Category | Type of Modification | Parameter | Number of days of advance intimation to be given to SEBI and market participants |
| Category A | Non-material modifications which can be made at the exchange level in yet to be launched and running contract | Symbol DescriptionContract CommencementDay(Y/L) Quotation/Base value (Y/L)Maximum Order SizeTick Size (Minimum PriceMovement) Strike Interval (Y/LNumber of Strikes Initial MarginExtreme Loss MarginDelivery Period MarginPre-expiry MarginOther MarginsUnderlying Quotation (Y/L) | 10 days |
| Category B | 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. | Last Trading Day /Due Date/Expiry Date#Trading UnitPrice Quote (Basis) Delivery CentreDelivery UnitAdditional Delivery Centre(s) Quality Specifications Quantity VariationTolerance LimitTrading Session Premium/DiscountUnderlying Price Quote (basis) Maximum Allowable Open Position | 30 days |
| Category C | 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. | Contract Launch Calendar Trading PeriodDaily Price LimitDelivery LogicSettlement of Contract/ Settlement Logic/Final settlement Method Exercise of OptionsMechanism of ExerciseDue Date Rate (Final Settlement Price) Tender PeriodStart Date of Near Month Staggered Delivery Period/Tender PeriodOption Type | 30 days |
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