Sebi starts cross margin facility on commodity futures to boost liquidity

Sebi on Tuesday decided to introduce cross margin benefit between commodity index futures and its underlying constituents futures, a move that will reduce the cost of trading and boost liquidity in such products. 

The move is part of Sebi's effort to improve the efficiency of the use of the margin capital by market participants, the regulator said in a circular. 

To be eligible for cross margin benefit, Sebi said contracts belonging to index futures and underlying constituents or its variants will belong to the same expiry month or to the nearest expiry month and should be from amongst the first three expiring contracts only.

Cross margin benefit on the eligible positions will be entirely withdrawn latest by the start of the tender period for the constituent futures of the index or its variants or the start of the expiry day, whichever is earlier.

Insider trading

Markets watchdog also decided to increase the reward amount for informants to a maximum of Rs 10 crore under the prohibition of insider trading regulations. 

The regulator's board, which met on Tuesday, approved amendments to the Sebi (Prohibition of Insider Trading) Regulations, 2015.