The Securities and Exchange Board of India (SEBI) on Wednesday revised position limits for clients in the commodity derivatives segment and capped monetary penalties for breaches, in a move aimed at facilitating ease of doing business.
The changes follow representations from market participants, recommendations of the Working Group on reviewing regulatory norms for agricultural commodity derivatives, the Commodity Derivatives Advisory Committee (CDAC), and public comments, SEBI said in a circular.
The regulator said the existing position limits were introduced in 2017 and were aligned with market conditions prevailing at the time.
Under the revised framework, monetary penalties for client-level open interest violations will be linked to the quantum of the breach and charged to the concerned member for every day of violation.
For violations of more than 2 percent of the prescribed limit, the penalty will be the lower of the amount calculated as limit exceeded × closing price × number of days of violation × 2 percent, or Rs 2 lakh.