Permission for trading in futures contracts and modification in contract specifications at exchange level

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....ract specifications at exchange level. This circular is beingissued to consolidate and update such norms prescribed for National Commodity Derivatives Exchanges by the erstwhile FMC. 3. Accordingly, the following are prescribed: a. Check-list of information/details to be submitted along with proposal for launch of new contract or/and for renewal of existing/earlier contracts All proposals of exchange for launch of new contract and/or for renewal of existing/earlier contracts shall be accompanied by complete information covering all the points delineated in the check-list appended at Annexure 1. The parameters / items listed in the check-list for compliance are illustrative and not exhaustive. Any additional relevant parameter/information as deemed necessary may also be furnished while sending proposal for contracts. b. Approval for futures contracts on continuous basis The Exchange wise list of contracts approved for continuous trading is placed at Annexure 2. Approval for continuous trading in futures contracts is contingent upon volume and open interest at the Exchange. Continuous approval for futures trading in the said contracts is subject to the following ter....

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...., shall ensure that there is no unhealthy speculative trading in the market, which may result in cornering or artificial rigging up or down of the prices by a particular member or group or class of members. ix. The list of contracts available for trading on continuous basis shall be reviewed by SEBI from time to time. c. Permission to allow modification in futures contract specifications at the exchange level To ensure that Exchanges are enabled to respond to the market requirements quickly, National Commodity Derivatives Exchanges are permitted to modify the futures contract specifications related to Ticker symbol, Basis, Maximum order size, Trading unit, Delivery unit, Quotation base value, Tick size, Delivery centers, additional delivery centers, issue related to Premium/Discount, Quality parameters and its relevant aspects such as Quantity variation and Tolerance limit in the futures contract specifications. The permission to modify the above parameters of the futures contract specifications is subject to the condition that Exchanges shall invariably inform the market participants and the regulator well in advance before introduction of any modification in contract spe....

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....iate 3 preceding months prior to the application   n. Which are the other exchanges where the proposed contract is already being traded and its/ their respective market share in terms of volumes & percentage of trades (estimated)?   o. Value Chain of the commodity   p. Degree of standardisation   q. Political sensitivity/price controls   r. Whether commodity is under purview of Essential commodities act / APMC Act / The Food Control Regulation Act etc.   s. Geographical coverage   t. Correlation with International Market   u. Seasonality   v. Price Volatility   2 CONTRACT DESIGN‐ Please Specify with Reasons   a. Lot size   b. Tick size   c. Period of the contract (one month, two months, etc.)   d. Quality standards (should meet FSSAI standards and any other statutor....

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....;          a.      Trading volume              b.     Open interest            c.      Deliveries            d.     Market participation            e.     Price movement            f.      Trade versus delivery            g.      Order versus actual trade            h.     Average trade size at Exchange            i.       Actual production versus actual delivery through exchange trading platform            j.  ....