Revised guidelines for Liquidity Enhancement Scheme in the Equity Cash and Equity Derivatives Segments

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..... ncement schemes in the equity cash and equity derivatives segments, and based on the discussions held in Secondary Market Advisory Committee, it has been decided to revise the framework for providing liquidity enhancement schemes as given below. 3. Introduction of liquidity enhancement schemes - The stock exchange may introduce liquidity enhancement schemes in equity cash and equity derivatives segments subject to the following: 3.1. The scheme shall have the prior approval of the Stock Exchange s Board and its implementation and outcome shall be monitored by the Board at quarterly intervals. 3.2. The scheme shall be objective, transparent, non-discretionary and non-discriminatory. 3.3. The scheme shall specify the incentives av .....

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..... stock exchange. Such schemes cannot be continued beyond the period of liquidity enhancement schemes of the initiating stock exchange. 4.3. The list of securities eligible for liquidity enhancement shall be disseminated to the market. 5. The incentives under liquidity enhancement schemes shall be transparent and measurable, and may take either of the following two forms: 5.1. Discount in fees, adjustment in fees in other segments or cash payment - The incentives during a financial year shall not exceed 25% of the net profits or 25% of the free reserves of the stock exchange, whichever is higher, as per the audited financial statements of the preceding financial year. 5.2. Shares, including options and warrants, of the stock excha .....

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..... rket maker / liquidity enhancer to disclose any conflict of interest while participating in the scheme. The same shall be disclosed by the stock exchange on their website. 8. This circular shall not be applicable to securities listed on SME Platform or SME Exchange. 9. This circular shall supersede earlier SEBI circulars viz. CIR/DNPD/5/2011 dated June 02, 2011 and CIR/MRD/DP/14/2010 dated February 08, 2013 on liquidity enhancement in the equity derivatives and equity cash segments. 10. Stock Exchanges are directed to: 10.1. take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant byelaws, rules and regulations; 10.2. bring the provisions of this circular .....

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