TaxTMI 
TaxTMI 
Permission for trading in futures contracts and modification in contract specifications at exchange level
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....ation Act, 1952 (FCRA) would continue to remain in force for a period of one year from the date on which FCRA was repealed (September 29, 2015), or till such time as notified by SEBI, whichever is earlier. 2. Erstwhile FMC, from time to time, had issued various norms for National Commodity Derivatives Exchanges related to permission for trading in futures contracts and modification in contract 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 exis....
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.... launch calendar, the Exchange(s) shall give prior appropriate notice to the market participants. Once the contracts are commenced, no terms of the contract specifications should be changed without prior approval of SEBI. iv. In case of contracts approved for continuous trading: a. If Exchange decides not to launch new contract for trading, then Exchange shall inform market participants well in advance and shall also keep the regulator informed with adequate reasons for not launching of such contract. b. If Exchange decides to de-list already running contract(s) having nil open interest, then exchange shall keep the regulator informed with adequate reasons for de-listing the contract(s). c. The re-launch of new contracts in case of a an....
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....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 specifications with reasons for the modifications. 4. The provisions of this circular shall come in....
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....erred trade quantity in physical market j. Shelf‐life of the commodity k. Global level production / consumption figures, major exporting & importing countries with figures l. Monthly price movement in futures market -both domestic and international for last 3 years m. Prevailing spot prices in the domestic physical market in the last three years and immediate 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 und....
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.... respect of failed deliveries, etc. 5. MARKET SURVEILLANCE AND RISK MANAGEMENT :- a. Permitted price variation in a day b. Open position limits in respect of client, member and market as a whole c. Checks and balances for high frequency/ Algo trades d. Initial margin, M ‐o‐M margin, and conditions under which special / additional margins could be levied by Exchanges e. Settlement / trade guarantee f. Cost of failed payments / deliveries g. Staggered delivery system Additional Information required in case of proposal for renewal of existing/earlier contracts 6. THE TRACK RECORD OF TRADING IN THE CONTRACT LIKE :‐ a. Trading volume b. Open interest c. Deliveries d. Market pa....