TaxTMI 
TaxTMI 
Position Limits for Commodity Derivatives, clubbing of open positions, penalties for violation of position limits
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....ver regulations of commodity derivatives market, SEBI vide its circulars CIR/CDMRD/DMP/2/2016 dated January 15, 2016 and CDMRD/DMP/CIR/32/2016 dated January 29, 2016 has issued revised norms with regard to position limits of agricultural commodity derivatives. 2. This circular is hereby issued in continuation of the above said SEBI circulars with an objective of consolidating and updating norms with regard to position limits and also to prescribe numerical position limits for all commodities which are presently being traded on the Commodity Derivatives Exchanges. 3. General Norms for Position Limits in Commodity Derivatives: The following norms shall be applicable to the Agricultural as well as Non-Agricultural commodity derivatives at co....
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....n table in Annexure- A or 5% of market-wide open interest, whichever is higher. 4.3. Member level position limits shall be 10 times of the numerical value of client level position limits or 20% of the market-wide open interest, whichever is higher. 5. Position Limits for Agricultural Commodity Derivatives: As prescribed vide SEBI circulars dated January 15, 2016 and January 29, 2016, following norms shall be applicable on Agricultural commodity derivatives at commodity level:- 5.1. For the purpose of calculating positions of a client, all long and short positions of the client across all contracts shall be added up separately and higher of the two shall be considered as his overall open position. 5.2. The overall Client level position l....
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....onitor the open position on a real time basis, and shall endeavour that no client or member breaches the open position limits 'at end of the day' as well as 'during intra-day trading'. Penalty shall be levied on those breaching the position limits at end of the day as well as during intra-day trading as provided in Annexure-C to this circular. 8. The provisions of this circular shall come into effect from September 29, 2016 in supersession of all directives issued by erstwhile FMC with regard to matters related to Position Limits, clubbing of open positions, penalties for violation of position limits. 9. The Exchanges are advised to: i. take steps to make necessary amendments to the relevant bye-laws, rules and regulation....
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....eed MT 30,000 20. Raw Jute MT 8,000 21. Red Chilli MT 2,500 22. Refined Soy Oil MT 35,000 23. Rubber MT 4,000 24. Sacking Bales 3,000 25. Soy Bean MT 60,000 26. Sugar MT 20,000 27. Turmeric MT 4,000 28. Wheat MT 20,000 NON-AGRICULTURAL COMMODITIES 1. Aluminum MT 25,000 2. Brent Crude Oil BBL 400,000 3. Copper MT 7,000 4. Crude Oil BBL 480,000 5. Gold Kgs 5,000 6. Lead MT 3,500 7. Natural Gas mmBtu 6,000,000 8. Nickel MT 1000 9. Silver MT 100 10. Steel MT 120,000 11. Zinc MT 7,000 Annexure- B A. Guidelines for Clubbing of Open Positions: 1. When a person is a partner in one or mo....
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....bove. Provided that, if at any time more deliveries than one are running in the same commodity, the above limit shall apply to the combined open position of the member or the non-member, as the case may be, in all such deliveries running concurrently. 4. Open position of a member shall be the total of the open position acquired by him by trading through or with other member and by appropriating the business of his clients(collectively for all clients). 5. The open position of a non-member shall be the total of the open position acquired by him trading through or with one or more members. B. Exemptions from Clubbing: 1. In the agriculture marketing set up of the rural India, co-operative societies play a crucial role. Primary Agricultur....
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.... also include other criteria such as PAN, patterns such as 'acting in concert' through common ownership and control structures and any other relevant criteria to club open positions that may be observed during the course of regular monitoring and surveillance that may appear to compromise market integrity. Annexure-C Position Limit Violation The following penal provisions are made to discourage/ prevent open interest violations at Commodity level / near month contract level- 1. Monetary penalty on the concerned member for violations in the open interest (either on own account or on account of clients) are linked to the quantum/ value of violation committed and to be charged from the concerned member for each such violation as under: a.....