NOTICE
CSE/Notices/SEBI/2012/N23
May 18, 2012
Re: Short-collection/Non-collection of client margins
(Derivatives Segments)
Members of
the Exchange are hereby informed that the Exchange has received a Circular from
SEBI vide Ref. No CIR/DNPD/7/2011,
dated August 10, 2011 regarding the above mentioned subjects. The contents
of the said Circular are reproduced hereunder for information and necessary
action of the Members.
Quote: -
CIRCULAR CIR/DNPD/7/2011 August 10, 2011 To Managing Director/ Chief Executive Officer Recognized Stock Exchanges Dear Sir/Madam, Sub:
Short-collection/Non-collection of client margins (Derivatives Segments) 1.
In
consultation with BSE, MCX-SX, NSE and USE, it has been decided that Stock Exchanges shall levy penalty
specified hereunder on trading members for short-collection/non-collection of
margins from clients in Equity and Currency Derivatives segments:
| For each member |
| ‘a’ |
Per day Penalty as %age of ‘a’ |
| (<
Rs 1 lakh) And (< 10% of applicable margin) |
0.5 |
| (≥
Rs 1 lakh) Or (≥ 10% of
applicable margin) |
1.0 |
Where
a = Short-collection/non-collection of margins per client per segment per day 2.
If
short/non-collection of margins for a client continues for more than 3
consecutive days, then penalty of 5% of the shortfall amount shall be levied
for each day of continued shortfall beyond the 3rd day of shortfall. 3.
If
short/non-collection of margins for a client takes place for more than 5 days
in a month, then penalty of 5% of the shortfall amount shall be levied for each
day, during the month, beyond the 5th day of shortfall. 4.
Notwithstanding
the above, if short collection of margin from clients is caused due to movement
of 3% or more in the index (close to close value of Nifty/Sensex for all equity
derivatives) and in the underlying currency pair (close to close settlement
price of currency futures, in case of all currency derivatives) on a given day,
(day T), then, the penalty for short collection shall be imposed only if the
shortfall continues to T+2 day. 5.
All
instances of non-reporting shall amount to 100% short collection and the
penalty as applicable shall be charged on these instances in respect of short
collection. 6.
If during
inspection it is found that a member has reported falsely the margin collected
from clients, the member shall be penalized 100% of the falsely reported amount
along with suspension of trading for 1 day in that segment. 7.
The penalty
shall be collected by the Stock Exchange within five days of the last working
day of the trading month and credited to its Investor Protection Fund. 8.
SEBI shall
examine implementation of this circular during inspection of the Stock Exchange.
9.
This
circular is issued in exercise of the powers conferred under Section 11(1) of
the 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. 10. The circular shall come into force from September 1,
2011. 11. This circular is available on SEBI website at
www.sebi.gov.in under the category “Derivatives- Circulars”. Yours faithfully, Sujit Prasad General ManagerDerivatives and New Products Department 022-2644-9460sujitp@sebi.gov.in
Unquote:
Members are requested to take note of the aforesaid
guidelines/circulars of SEBI and act accordingly.
M.A.V. Raju
Deputy General Manager