SEBI vide its Circular dated 27th September, 2022 made modification in the norms for Daily Price Limits (DPL) for Commodity Futures Contracts. The exchanges have informed that closing price on domestic exchange differs from closing price on international exchange/s (after necessary currency conversion), because of difference in methodology of calculation of closing price. Due to such difference in closing price, the aggregate DPL range on domestic exchange may lag behind (either upwards or downwards) the prices on international exchange in next trading session.
| Sr. No. | Part/Chapter/Section /Sub-section(s) | New norms (SEBI Circular dated 27th September, 2022) | Old norms | Comment |
| 1. | Substitution of para 7.4 of norms for Daily Price Limits (DPL) for Commodity Futures Contracts | “7.4 In case the price movement in the international markets is more than the aggregate DPL or if international price is beyond aggregate DPL range (after appropriate currency conversion) when compared with closing price on previous day on domestic exchange, the same maybe further relaxed in stages of 3% by the Exchange with cooling off period of 15 minutes. For such instances, the Stock Exchanges shall give appropriate notice to the market along with all the relevant details and justification for the same.” | In case the price movement in the international markets is more than the aggregate DPL, the same maybe further relaxed in stages of 3% by the Exchange with cooling off period of 15 minutes. For such instances, the Stock Exchanges shall immediately inform the Integrated Surveillance Department (ISD) of SEBI about any such relaxation of DPLs beyond Aggregate DPL, along with all the relevant details and justification for the same. | Due to this amendment, now the problem related to difference of closing price on domestic exchange and international exchange will be resolved. |
| 2. | Substitution of para 7.5 of norms for Daily Price Limits (DPL) for Commodity Futures Contracts | “7.5 Only in the event of exceptional circumstances, where there is extreme price movement, beyond the initial slab of the DPL, in the international markets, during trading hours or after the closure of trading on domestic exchanges, the stock exchanges can relax the DPL directly by the required level, by giving appropriate notice to the market, as per para 7.4. above.” | Only in the event of exceptional circumstances, where there is extreme price movement, beyond the initial slab of the DPL, in the international markets, during trading hours or after the closure of trading on domestic exchanges, the stock exchanges can relax the DPL directly by the required level, by giving appropriate notice to the marketand also inform the Integrated Surveillance Department (ISD) of SEBI immediately, as per para 7.4. above. | This Clause has been substituted in order to maintain parity between para 7.4 and para 7.5 of norms for Daily Price Limits (DPL) for Commodity Futures Contracts. |
Further, the stock exchanges shall inform SEBI of all such instances of relaxation of DPL pursuant to Para 7.4 and Para 7.5 above, under Para 10 of Section I in the Monthly Development Report being submitted as per SEBI Circular dated 09th December, 2015.
It is clarified that breach of slab is not essential for implementation of Clause 7.4 and Clause 7.5 of SEBI Circular dated 11th January, 2021.
This circular shall be effective immediately and shall be applicable to all the Managing Directors / Chief Executive Officers of All Exchanges having Commodity Derivatives Segment.
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