TMI BlogRevision in Daily Price Limits (DPL) for Commodity Futures ContractsX X X X Extracts X X X X X X X X Extracts X X X X ..... ct investors from sudden and extreme price movements and provides cooling-off period to re-assess the information and fundamentals impacting the price of the commodity futures contract. Thus, DPLs can neither be too narrow nor too wide as it will restrict fair price discovery. 2. SEBI vide Circular no. CIR/CDMRD/DMP/2/2016 dated January 15, 2016 and Circular no. SEBI/HO/CDMRD/DMP/CIR/P/2016/83 dated September 07, 2016 had issued norms for Daily Price Limits (DPL) for agricultural and non-agricultural commodity derivatives. Continuing with SEBI s endeavor to develop the commodity derivatives market and in consultation with the stock exchanges, the norms for DPL for commodity futures contracts (excluding Index Futures and options) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3% 1% 4% 6.3. Once the initial slab limit is breached in any contract, then, after a cooling-off period of 15 minutes, this limit shall be increased further by enhanced slab, only in that contract. 6.4. During the cooling-off period of 15 minutes, the trading shall be permitted, within the initial slab limit. 6.5. After the DPL is enhanced, trading shall be permitted throughout the day within the enhanced Aggregate DPL. 7. DPL for Commodity futures contracts which are based on non-agricultural goods 7.1. Following slabs shall be applied for DPL on futures contracts based on non-agricultural goods: Table B Catego ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls and justification for the same. 7.5. Only in the event of exceptional circumstances, where there is extreme price movement, beyond the initial slab of the DPL, in the international markets, during trading hours or after the closure of trading on domestic exchanges, the stock exchanges can relax the DPL directly by the required level, by giving appropriate notice to the market and also inform the Integrated Surveillance Department (ISD) of SEBI immediately, as per para 7.4. above. 8. DPL on First Trading Day of the Contract 8.1. In order to prescribe DPL slabs for the first trading day (launch day) of each contract, Stock Exchange shall determine base price as under: 8.1.1 Volume Weighted Average Price (VWAP) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executed in a contract on a day, the stock exchange/ clearing corporation shall adopt an appropriate methodology for determining daily closing price/ settlement price and disclose the same on their website for dissemination to the stakeholders. 9.2. The Stock Exchange / Clearing Corporation can increase the number of minimum trades based on the liquidity criteria set by the Exchange / Clearing Corporation. Approval shall be taken from their Risk Management Committee on liquidity criteria and disclosed by them on their website. 10. For any commodity futures contracts, the stock exchange at its discretion, may prescribe DPL narrower than the slabs prescribed above based upon reasons including analysis of price movements, findings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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