Sebi categorises contract specification parameters of commodity derivatives

Mumbai: The Securities and Exchange Board of India (Sebi) on Thursday prescribed categories for modifications in contract specification parameters of commodity derivatives contracts.

In a circular, the markets regulator defined that non-material modifications which can be made at the exchange level in yet to be launched and running contracts, would include initial margin, extreme loss margin, delivery period margin among other parameters.

It pointed that material modifications which can be made at the exchange level in yet to be launched contracts or running contracts which have nil open interest, shall include among other things, trading unit, tolerance limit, and maximum allowable open position.


These modifications shall require approval from product advisory committee and approval of regulatory oversight committee to be obtained post facto.

Sebi said that material modifications which can be made only after approval from the regulator, include among other things contract launch calendar, trading period, daily price limit, delivery logic , settlement of contract, final settlement method exercise of options mechanism of exercise, and tender period.

These modifications will require deliberations and approval from product advisory committee and regulatory oversight committee before seeking permission from Sebi.

The circular comes into effect from December 1.