MANU/SDER/0007/2018

Ministry : Securities and Exchange Board of India

Department/Board : Commodity Derivatives Market Regulation Department

Circular No. : SEBI/HO/CDMRD/DMP/CIR/P/2018/55

Date : 26.03.2018

Notification/ Circulars Referred : Circular CIR/MRD/DP/14/2014 dated April 23, 2014 MANU/SDER/0002/2014

Citing Reference:
Circular CIR/MRD/DP/14/2014 dated April 23, 2014 MANU/SDER/0002/2014  Referred

To,

All National Commodity Derivatives Exchanges

Sir / Madam,

Guidelines for Liquidity Enhancement Schemes (LES) in Commodity Derivatives Contracts

1. SEBI vide its circular CIR/MRD/DP/14/2014 dated April 23, 2014, has prescribed revised guidelines for Liquidity Enhancement Schemes (LES) in Equity Cash and Equity Derivatives segments.

2. Based upon feedback from exchanges, it has been decided to permit LES in commodity derivatives contracts subject to the requirements stipulated vide abovementioned SEBI Circular dated April 23, 2014.

3. In addition to the conditions and other requirements stipulated in the abovementioned circular, with regard to the eligibility of commodity derivatives contracts for LES, following additional requirements shall apply:-

3.1. Any commodity that is classified as 'Sensitive Commodity' by the Exchange, shall not be eligible for LES.

3.2. If any commodity derivative product is 'liquid' on any of the exchanges i.e. there is at least one exchange where the average daily turnover in Options or/and Futures on similar underlying commodity is more than or equal to INR 200 crore for agricultural and agri-processed commodity, and INR 1000 crore for non-agricultural commodity during the last six months, then no other exchange is eligible to launch LES on the same derivative product, unless the exchange where the product is liquid, has itself also launched a LES on said product.