SEBI introduces additional commodities as eligible liquid assets for commodity derivatives segment

Sep 16, 2019 | by Avantis RegTech Legal Research Team


The Securities and Exchange Board of India (SEBI) on September 13, 2019, have decided to include diamond, base metals and alloys in the list of permissible liquid assets, subject to concentration limits for non-bullion collateral as specified vide SEBI Circular SEBI/HO/CDMRD/DRMP/CIR/P/2016/112 dated October 14, 2016 where the concentration limit for Bullion as a collateral was revised to 30%.

SEBI has recently permitted the list of commodities or commodity groups as Liquid Assets consists of Bullion, Steel and Agricultural commodities. Considering the introduction of compulsory delivery based diamond and base metal derivatives contracts and feedback received from the stakeholders, SEBI has been decided to include diamond, base metals and alloys in the list of permissible liquid assets and the minimum haircut is mentioned below:-

Item

Minimum Haircut

Base metals and Alloys

30%

Diamond

40%

 All commodities to be accepted as collateral should be of same quality specification which is deliverable under the contract specification of commodity derivatives being traded on the Exchange and all other provisions with regard to liquid assets shall continue to be in force.

This Circular shall be effective from the date of the Circular that is September 13, 2019.

[SEBI/HO/CDMRD/DRMP/CIR/P/2019/100]


Bookmark

Related Updates



Alternate Text

Get updates on the go on RuleZbook Mobile App.