October 22, 2014
All Stock Exchanges and Clearing Corporations.
Dear Sir / Madam,
Sub: Revision of proprietary position limits of non-bank stock brokers for currency derivatives contracts
This is further to SEBI circular no. CIR/MRD/DP/20/2014 dated June 20, 2014, wherein, revised position limits in the USD-INR, EUR-INR, GBP-INR and JPY-INR contracts were specified.
2. Based on the feedback received from market participants with regard to the proprietary positions limits of stock brokers in the exchange traded currency derivatives contracts, it has been decided to clarify the following:
(i) Position limits stated at para 12.(a) of SEBI circular CIR/MRD/DP/20/2014 dated June 20, 2014 shall be the total limits available to the stock brokers for taking positions on proprietary basis and for positions of their clients.
(ii) Para 12.(b) of SEBI circular CIR/MRD/DP/20/2014 dated June 20, 2014 shall be read as under:
Proprietary open position limits of a stock broker, who is not a bank, across all contracts in a permitted currency pair shall be higher of (a) 15% of the total open interest in the currency pair, or (b) USD 50 million / EUR 25 million / GBP 25 million / JPY 1000 million, as applicable.
3. Stock Exchanges and Clearing Corporations are directed to:
(a) take necessary steps to put in place systems for implementation of this circular, including necessary amendments to the relevant bye-laws, rules and regulations;
(b) bring the provisions of this circular to the notice of the stock brokers / clearing members and also disseminate the same on their website;
(c) communicate to SEBI the status of implementation of the provisions of this circular.
4. This circular is being issued in exercise of 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.
Deputy General Manager