- SEBI capped client-level penalty for position limit breaches at Rs 2 lakh
- Penalties vary by breach size: Rs 10,000 for up to 2%, Rs 2 lakh beyond 2%
- Exchanges can square off excess positions if violations persist past next trading day
The Securities and Exchange Board of India (SEBI) has revised position limits and penalty norms for commodity derivatives, with the maximum penalty for client-level position limit violations capped at Rs 2 lakh.
Under the revised framework, violations exceeding 2% of the prescribed position limit will attract a penalty of up to Rs 2 lakh. For breaches of up to 2%, the penalty will be capped at Rs 10,000.
The regulator said penalties will be determined based on the quantum and duration of the position limit breach. Members will be required to bring excess positions within prescribed limits by the next trading day.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
ALSO READ: SEBI Proposes Easier Director Eligibility, Standard Norms For Key Officials At MIIs
If the violation continues, exchanges will have the power to square off excess positions, SEBI said.
The regulator has also revised the definition of a broad commodity for agricultural derivatives. Commodities with a deliverable supply of at least 10 lakh metric tonnes or Rs 5,000 crore will fall under the broad commodity category.
Position limits have been set at 2% of deliverable supply for broad commodities and 1% for narrow commodities. For sensitive commodities, the limit has been fixed at 0.5% of deliverable supply.
Commodities moving from the narrow to the broad category will retain the 1% position limit for one year, according to SEBI. The revised position limits and penalty norms will come into immediate effect.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
