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Sebi asks commodity bourses to identify 'sensitive' agricultural products

Sebi said these commodities would be categorised based on the average of production & import data

Press Trust of India  |  New Delhi 

Sebi
The logo of the Securities and Exchange Board of India (SEBI) is pictured on the premises of its headquarters in Mumbai (Photo: Reuters)

today asked to identify 'sensitive' that are prone to government interventions or could have seen frequent price manipulation in the past.

Derivative trading in these 'sensitive' commodities would be restricted to an overall client-level position limit of 0.25 per cent of total deliverable supply, said in a circular.


The decision follows receiving feedback from the that current numerical limits applicable for agricultural derivatives are inadequate and not in consonance with the deliverable of the

has asked all the national derivatives to jointly classify into three categories -- sensitive, broad and narrow -- on annual basis.

The regulator said these commodities would be categorised based on the average of production data and import data of past five years on a rolling basis and keeping in view various extraneous factors that affect the trading in derivatives in any given year.

An agricultural would be classified as a broad, if the average deliverable of such for past five year is at least 10 lakh tonne in quantitative term and is at least Rs 5,000 crore in monetary term.

has said that derivative trading in these 'broad' commodities would be restricted to an overall client-level position limit of one per cent per cent of total deliverable

If a does not fall in either of two categories sensitive or broad then it would be called narrow In this category, position limits would be 0.5 per cent of the deliverable

The deliverable for an agricultural would be "production plus imports".

"Whenever an agricultural of 'narrow' category is required to be re-categorised to 'broad' in subsequent years, such re-categorisation may be possible only if both, average deliverable of such for the past five years and monetary value (Rs 5,000 crore) exceeds by more than 5 per cent," said.

has asked to complete this exercise at earliest and notify the same to the within 20 days and the revised limits would become applicable for all running contracts with effect from October 1.

"For any agricultural commodity, the overall exchange- wide gross position limit on open interests shall be 50 per cent of its deliverable ..Which shall also be jointly notified by along with client level numerical limits," the regulator noted.

With regard to clubbing of position limits, has directed to jointly formulate uniform guidelines and disclose them to the within a month.

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