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ARTICLE · 11 APRIL 2018

Liquidity Enhancement Schemes In Commodity Derivative Contracts

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LES shall not be permitted for such schemes which incentivize brokers based on activation of Unique Client Codes, number of trades or open interest.

IndiaFinance and Banking
S.S. Rana & Co. Advocates
S.S. Rana & Co. Advocates
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Background:

The Securities and Exchange Board of India (hereinafter referred as 'SEBI') vide circular1 dated March 26, 2018, has prescribed guidelines for Liquidity Enhancement Schemes (hereinafter referred as 'LES') in Commodity Derivative Contracts.

Requirements stipulated in Equity Cash and Equity Derivatives segments:

SEBI has decided to permit LES in commodity derivatives contracts subject to the conditions and requirements as stipulated for LES in Equity Cash and Equity Derivatives segments vide SEBI Circular dated April 23, 2014.2

Additional requirements:

In addition to the conditions and requirements as mentioned in the above circular, the following conditions shall apply to LES in commodity derivatives contracts:

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