Securities and Exchange Board of India

01.09.2016

Capital Market

Additional Risk Management Norms for National Commodity Derivatives Exchanges

MANU/SDER/0015/2016

With an objective of streamlining and strengthening risk management framework across national commodity derivatives exchanges SEBI vide circular CIR/CDMRD/DRMP/01/2015 dated October 01, 2015, had prescribed comprehensive risk management framework for National Commodity Derivatives Exchanges. In order to further strengthen the risk management framework of commodity derivatives markets and avoid any systemic risk, it has been decided to prescribe additional norms/modify (to the extent specified hereunder) certain existing norms on risk management at National Commodity Derivatives Exchanges. It is emphasized that risk management is primarily the responsibility of exchanges. In cases of excessive market volatility or circumstances where risk element is higher, exchanges are expected to impose higher margins and/or additional margins in the form of special/ ad-hoc or other margins as considered appropriate by the exchanges. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect interests of investors in securities and to promote development of, and to regulate securities market.

Tags : Risk management Norms Commodity Derivatives

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