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Informist, Wednesday, Sept. 9, 2026

 

MUMBAI – The Securities and Exchange Board of India has revised the position limits for clients in commodity derivatives and put an upper limit on the penalty levied for violation of position limits, with immediate effect. A consultation paper for the same was floated on May 12.

 

SEBI puts agricultural commodities into three categories—-broad, narrow, and sensitive--and has doubled the position limit for these categories to 2%, 1%, and 0.5% of the deliverable supply, respectively. The market regulator has also tweaked the definition of the "broad" category. An agricultural commodity will be classified under this category if it is not a "sensitive" commodity and also has had an average deliverable supply of at least 1 million tonnes or worth at least INR 50 billion in the preceding five years.

 

"The commodities which may shift from narrow category to broad category post change in definition of broad category, shall initially retain position limit of 1% for one year," the regulator said.

 

SEBI has also put an upper limit of INR 200,000 for violations of position of more than 2% of the prescribed limit. If the violation is up to 2% of the prescribed limit, then a minimum penalty of INR 10,000 is applicable. "The member has to ensure reduction in position and to bring it within the prescribed limit(s) by the next trading day after the day of violation," SEBI said, adding that if the violation persists, the exchange will square off the excess position without further notice to the member by putting out orders on the member's behalf.

 

If a member's position violations exceed 2% of the prescribed limit more than three times in a month, the exchange will put such member on square-off mode for one day, if the violation is for the same commodity. If any member violates both conditions, such member will have to pay an additional penalty which will be same as the one charged for violating the prescribed limit. "However, trading members shall be exempted from the imposition of such additional penalty where the open position violation arises exclusively on account of clubbing of positions," SEBI said.  End

 

Reported by Ashutosh Pati

Edited by Rajeev Pai

 

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