SEBI vide Circular dated September 01, 2016, inter alia, prescribed norms to regain matched book vide Clause ‘5’ of the Annexure – I to the said circular. The norms prescribed four alternative tools to regain a matched book based on market conditions.
Based on the experience gained with regard to the implementation of these norms and the feedback from Clearing Corporations (CCs) and other stakeholders, it has been decided to revise the Alternatives ‘3’ and ‘4’ in terms of compensation and penalty applicable on tear-up of positions as under.
Alternative 3: Voluntary tear-up at last mark-to-market price along with compensation equal to 10% of last mark-to-market price and penalty equal to 1% of last mark-to-market price (to be credited to SGF).
Alternative 4: Partial tear-up (pro-rata against members/clients having opposite positions) at last mark-to-market price along with compensation equal to 8% of last mark-to-market price and penalty equal to 1% of last mark-to-market price (to be credited to SGF).
The other provisions with regard to regaining of the matched book prescribed by the earlier circular dated September 01, 2016, shall continue to prevail.
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