Review of Advance Intimation timelines for modifications in the contract specifications of commodity derivative contracts

Last updated: 09 July 2021

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The Securities and Exchange Board of India (SEBI) has reviewed and updated the timelines for advance intimation regarding modifications to commodity derivative contract specifications. Previously, different categories of modifications had varying intimation periods. Now, all contract modifications, regardless of category (A, B, or C), will require a uniform advance intimation period of 10 days. This change aims to ensure uniformity and that modifications effectively reflect the physical market.

Securities and Exchange Board of India

Circular No.: SEBI/HO/CDMRD_DoP/P/CIR/2021/592

Dated: July 08, 2021

The Managing Directors / Chief Executive Officers
All Recognized Stock Exchanges having Commodity Derivatives Segment

Dear Sir / Madam,

Sub: Review of Advance Intimation timelines for modifications in the contract specifications of commodity derivatives contracts

1. SEBI has specified the procedure for carrying out modifications in the contract specifications of commodity derivatives contracts vide circular no. SEBI/HO/CDMRD/CIR/P/2019/135 dated November 14, 2019. Based on their materiality, the contract modifications are categorized into Category A, Category B and Category C. As per the aforesaid circular, the permission to modify contract specifications is subject to the condition that before introduction of any modification, the Stock Exchanges shall inform SEBI and market participants along with reasons for the modifications. The advance intimation timelines mentioned in the aforesaid circular are 10 days for Category A and 30 days for Category B and Category C contract modifications.

2. In order to bring in uniformity while giving effect to the contract modifications so that they have the desired impact and the modified contract represents a healthy replica of the physical market, it has been decided, in consultation with the Stock Exchanges, to reduce the number of days of advance intimation for all the three categories i.e. Category A, Category B and Category C, to 10 days.

3. The other provisions of circular no. SEBI/HO/CDMRD/CIR/P/2019/135 dated November 14, 2019 shall continue to remain the same.

4. The provisions of this circular shall be effective from the date of this circular.

5. The Circular is issued in exercise of powers conferred under Section 11 (1) of Securities and Exchange Board of India Act, 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

6. This circular is available on the SEBI website at www.sebi.gov.in under the Category “Circulars” and “Info for Commodity Derivatives”.

Yours faithfully,

Priyanka Mahapatra
Deputy General Manager
Division of Products
Commodity Derivatives Market Regulation Department
Email: priyankam@sebi.gov.in

FAQ :

The main change is the reduction of the advance intimation period for modifications in commodity derivative contract specifications to 10 days for all categories (A, B, and C).

Previously, the advance intimation timelines were 10 days for Category A modifications and 30 days for Category B and C modifications.

All three categories of contract modifications – Category A, Category B, and Category C – are affected by this change.

The provisions of this circular are effective from the date of the circular, which is July 08, 2021.

No, other provisions of the SEBI circular dated November 14, 2019, shall continue to remain the same.