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BSE to introduce liquidity enhancement scheme in brent crude oil from Feb

A commodity derivative product is considered to be 'liquid' on the basis of average daily turnover.

Press Trust of India  |  New Delhi 

BSE, Bombay stock exchange

With an objective to boost trade in the commodity derivatives segment, the on Tuesday said it will introduce enhancement scheme in futures from February 1.

Under the enhancement schemes (LES), brokers and other market intermediaries are given incentives for a specified period of time to bring in and generate investor interest in securities that have limited trading activity.

In a circular, the said the exchange "shall introduce liquidity enhancement scheme in futures in commodity derivatives with effect from February 1, 2020".

Earlier in March 2018, regulator Sebi had said "sensitive" commodities that are prone to frequent price fluctuation as well as government interventions will not be eligible for LES.

Sebi had asked exchanges to put in place a mechanism to ensure that the LES did not create artificial volumes, did not take away liquidity form the market, is not manipulative in nature and will not lead to mis-selling of the product in the market.

A commodity derivative product is considered to be 'liquid' on the basis of average daily turnover. In the case of agriculture and agri-processed commodities, the threshold is Rs 200 crore while it is Rs 1,000 crore for non-agricultural commodities.

First Published: Tue, January 14 2020. 19:55 IST
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