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TMI BlogReview of delivery default normsX X X X Extracts X X X X X X X X Extracts X X X X ..... d September 21, 2016 had prescribed, inter-alia, provisions for the levy of penalty in the event of delivery default. 2. SEBI had received representations from market participants in the commodity derivatives segment for standardization of delivery default norms, strengthening the deterrent mechanism and ensuring adequate compensation to the non-defaulting counterparty. 3. In view of the above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows: 4.1 Penalty on seller in case of delivery default (default in delivery against open position at expiry in case of compulsory delivery contracts, default in delivery after giving intention for delivery) shall be as follows: 4.1.1 Futures contracts on agri-commodities: 4% of Settlement Price + replacement cost (difference between settlement price and average of three highest of the last spo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GF) of the Clearing Corporation 4.1.4.2 Up to 0.25% of Settlement Price may be retained by the Clearing Corporation towards administration expenses 4.1.4.3 (1% of Settlement Price in case of non-agri goods or 2% of settlement price in case of agri goods) plus replacement cost shall go to buyer who was entitled to receive delivery 4.1.5 In addition, Clearing Corporation may have appropriate d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard 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. 7. This circular is available on SEBI website at www.sebi.gov.in Yours faithfully Vishal V. Nair Deputy General Manager Division of Risk Management Commodity Derivative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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