Modifications in the contract specifications of commodity derivatives contracts

1. SEBI vide its circular ref. no. SEBI/HO/CDMRD/CIR/2016/88 dated September 20, 2016 had inter-alia prescribed at Para 3(c) provisions regarding permission to allow modifications in contract specifications at the exchange level.

2. In order to streamline the process and after consultation with the exchanges, it has been decided to categorise the modifications in contract specification parameters in the following three categories:

a. Category A: Non-material modifications which can be made at the exchange level is yet to be launched and running contracts. b. Category B: Material modifications which can be made at the exchange level is yet to be launched contracts or running contracts which have nil open interest. These modifications shall require approval from Product Advisory Committee and approval of the Regulatory Oversight Committee to be obtained post facto. c. Category C: Material modifications which can be made only after approval from SEBI. These modifications shall require deliberations and approval from the Product Advisory Committee and Regulatory Oversight Committee before seeking permission from SEBI.

3. The list of various contract specification parameters as per the above-stated categories along with the timelines for advance intimation of modification to SEBI and market participant is given at Annexure I.

4. The permission to modify contract specification parameters of commodity derivatives contracts is subject to the condition that before introduction of any modification in contract specifications the Exchanges shall inform SEBI and market participants along with reasons for the modifications as per the timeline mentioned in Annexure I. However, this shall not apply to certain modifications which are required to be effected immediately considering the exigencies of the situation as per surveillance measure.

*Please refer the detailed circular here –> CIRCULAR


Securities Exchange Board of India

[Circular dt. 14-11-2019]

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