Review of delivery default norms

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.... September 21, 2016 had prescribed, inter-alia, provisions for the levy of penalty in the event of delivery default. 2. SEBI had received representations from market participants in the commodity derivatives segment for standardization of delivery default norms, strengthening the deterrent mechanism and ensuring adequate compensation to the non-defaulting counterparty. 3. In view of the above, t....

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....ws: 4.1 Penalty on seller in case of delivery default (default in delivery against open position at expiry in case of compulsory delivery contracts, default in delivery after giving intention for delivery) shall be as follows: 4.1.1 Futures contracts on agri-commodities: 4% of Settlement Price + replacement cost (difference between settlement price and average of three highest of the last spot....

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....F) of the Clearing Corporation 4.1.4.2 Up to 0.25% of Settlement Price may be retained by the Clearing Corporation towards administration expenses 4.1.4.3 (1% of Settlement Price in case of non-agri goods or 2% of settlement price in case of agri goods) plus replacement cost shall go to buyer who was entitled to receive delivery 4.1.5 In addition, Clearing Corporation may have appropriate de....