The Weekly Obiter

POSITION LIMITS FOR CROSS-CURRENCY FUTURES AND OPTIONS CONTRACTS ON EXCHANGE IN INTERNATIONAL FINANCIAL SERVICES CENTRES (IFSC): SEBI: MAY 17, 2017

June 08, 2017

The SEBI through its Circular No. SEBI/HO/MRD/DRMNP/CIR/P2017/43 in exercise of powers conferred under section 11(1) of the Securities Exchange Board of India Act, 1992 to protect the interest of the investors in securities and to promote the development of, and to regulate the securities market has decided that the position limits for eligible market participants, per currency per stock exchange, shall be as follows:

A) Trading Members (Positions on proprietary basis as well as clients’ position) - Gross open position across all contracts not to exceed 15% of the total open interest or USD 1 billion equivalent, whichever is higher.

B) Institutional Investors– Gross open position across all contracts not to exceed 15% of the total open interest or USD 1 billion equivalent, whichever is higher.

C) Eligible Foreign Investors (as referred to in SEBI Circular IMD/HO/FPIC/CIR/2017/003 dated January 04, 2017) - Gross open position across all contracts not to exceed 15% of the total open interest or USD 1 billion equivalent, whichever is higher.

D) Other Clients– Gross open position across all contracts not to exceed 6% of the total open interest or USD 100 million equivalent, whichever is higher.

It has also been decided that stock exchanges shall impose appropriate penalties for violation of position limits by eligible market participants. 

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