You are here: Home » Markets » News
Business Standard

BSE changes limit for risk reduction mode in currency futures

RRM is not essentially a type of order but a mode into which a member is put into when he violates his collateral limit

Press Trust of India  |  Mumbai 

BSE changes limit for risk reduction mode in currency futures

Top stock exchange has decided to revise the threshold for activation of for clearing members on its currency derivatives and interest rate derivatives segment, from Monday.

Under the revised norms, the (RRM) would be activated when 90 per cent of the clearing members' collateral available for adjustment against margins gets utilised.


This is against the current practice of activating the mode on 100 per cent utilisation of collateral deposited.

"As part of a continuous review of risk processes and in an effort to align risk management practices across segments, it has been decided to revise the activation threshold in its currency derivatives segment," said in a circular.

"The circular shall come into effect from Monday, November 27, 2017," it added.

A similar circular was also issued for interest rate futures segment.

When a member's collateral falls crosses the threshold, he will be allowed to put only risk reducing orders and will not be allowed to take any fresh positions.

RRM is not essentially a type of order but a mode into which a member is put into when he violates his collateral limit.

A member who has entered the will be allowed to put only one risk reducing order at a time.

First Published: Sun, November 26 2017. 15:50 IST
RECOMMENDED FOR YOU