The Securities and Exchange Board of India (SEBI) has issued a crucial circular, SEBI/HO/MRD/MRD-PoD-1/P/CIR/2024/57, on May 24, 2024, addressing modifications in the staggered delivery period for commodity futures contracts.
SEBI’s Master Circular for Commodity Derivatives Segment, dated August 04, 2023, lays down comprehensive guidelines for stock exchanges and clearing corporations operating in the commodity derivatives segment. Chapter 11 of this circular focuses on Delivery and Settlement.
The recent modification, as outlined in paragraph 11.1.3 of the Master Circular, pertains to the minimum duration of staggered delivery periods. Following consultations with market participants and deliberations by the Commodity Derivatives Advisory Committee (CDAC) of SEBI, the revised minimum duration now stands at three working days.
Effective from July 01, 2024, this modification will impact contracts scheduled for staggered delivery beyond this date. Stock exchanges and clearing corporations are obligated to communicate and implement the provisions of this circular, ensuring compliance among their members. SEBI emphasizes the dissemination of this information through their respective websites.
In conclusion, SEBI’s circular signifies a proactive step towards refining the operational framework of commodity futures contracts. By extending the minimum duration of staggered delivery periods, SEBI aims to enhance market efficiency and safeguard investor interests. Market participants need to adapt to these changes promptly to ensure seamless compliance and continuity in trading activities. The circular underscores SEBI’s commitment to fostering a robust and transparent securities market, ultimately benefiting investors and stakeholders alike.
Securities and Exchange Board of India
Circular No. SEBI/HO/MRD/MRD-PoD-1/P/CIR/2024/57 Dated: May 24, 2024
The Managing Directors / Chief Executive Officers
All Recognised Stock Exchanges and Clearing Corporations having Commodity
Derivatives Segment
Dear Sir / Madam,
Subject: Modification in Staggered Delivery Period in Commodity Futures Contracts
1. SEBI vide ‘Master Circular for Commodity Derivatives Segment’ dated August 04, 2023 has issued various requirements for stock exchanges and clearing corporations for compliance in commodity derivatives segment. Chapter 11 of aforementioned Master Circular deals with Delivery and Settlement.
2. Based on representations received from market participants and deliberations by Commodity Derivatives Advisory Committee (CDAC) of SEBI, paragraph 11.1.3 of the aforementioned Master Circular on Minimum duration of staggered delivery stands revised as follows and other conditions remain the same:
“11.1.3. The minimum duration of staggered delivery period shall be at least three working days.”
3. The circular shall be effective from July 01, 2024 i.e., for contracts where staggered delivery is scheduled after this date.
4. The Stock Exchanges and Clearing Corporations are advised to bring the provisions of this circular to the notice of their members and also to disseminate the same on their website.
5. This Circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
6. The Circular is issued with the approval of the competent authority.
7. This circular is available on SEBI website www.sebi.gov.in under the category “Circulars” and “Info for Commodity Derivatives”
Yours faithfully,
Naveen Sharma
General Manager
Market Regulation Department
naveens@sebi.gov.in
Phone No.: 022-26449709
