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Notices
Notice No20110928-1Notice Date28 Sep 2011
CategoryTradingSegmentDerivatives
SubjectIncentive Pay-out Process for Liquidity Enhancement Incentive Programme LEIPS-I (Beta) & LEIPS-(II)
Content

 

Further to the notice no 201110907-5 dated September 07, 2011, wherein the Exchange has announced the launch of Liquidity Enhancement Incentive Programme (LEIPS) with the goal of creating lasting, self-sustaining liquidity in the BSE’s Equity Derivatives segment, it is hereby informed that registered all LEIPS participants i.e. both Market Makers (MM) and General Market Participants (GMP) herein referred to as LEIPs Members for brevity shall be incentivized by payment of cash under following categories –
 
1.       Volume based incentive payout: Payable to all LEIPS members
  • On daily basis @ GMP rate – Applicable in both LEIPS-I (Beta) and LEIPS – II phases
  • At the end of month, to market makers on fulfillment of their quoting obligations. They will be paid the difference amount between the MM & GMP payout rates – Applicable in LEIPS – II phase
2.       Open interest based incentive payout (payable on End of Month basis) – Applicable in LEIPS –II phase 
 
In respect of incentives mentioned in point 1 and 2 above, LEIPS members are hereby requested to note that the following process shall be followed for disbursing LEIPS incentive payouts -
 
1.       The Exchange shall compute the payout on daily basis based on the trading activity of the registered LEIPS members based on applicable rates.
2.       Incentive payout shall be credited to the existing designated Equity (Cash) Market Settlement a/c in the designated clearing banks of eligible LEIPS members using the existing bank interface.
3.       A LEIPS member who is operating in capacity of Limited Trading Member (LTM) shall be required to open designated a/c for the purpose of receiving the incentives in the designated clearing bank.
4.       The daily payout shall be credited in LEIPS member accounts by noon of next working day, unless specified otherwise by the Exchange from time to time.
5.       The incentive payments shall be made net of TDS (after deducting the TDS applicable from time to time) and service tax (as applicable from time to time). The service tax would be reimbursed to the LEIP member on the fulfillment of the process prescribed in points no. 7 to 10
6.       The incentive payment shall be rounded off to the nearest rupee.
7.       LEIPS members may claim service tax refund on the incentives earned by them under the category of ‘Business Auxiliary Service’.
8.       In order to claim the service tax refund, LEIPS members would be required to submit service tax invoices on a fortnightly basis clearly quoting their Service Tax Registration number therein.
9.       The Exchange shall provide an on-line facility to members through the BEFS system (weblink - https://befs.bseindia.com) under the menu section ‘LEIPS’ to submit service tax invoices in electronic form. The members are required to submit service tax invoices in PDF format only, duly signed by their authorized representative (Please refer to Annexure 1 for illustrative screen)
·         The following details are required to be specified at the time of uploading the invoice -
·         Period for which invoice is submitted (Start Date and End Date)
·         Invoice Number
·         Service Tax Amount
·         For operational convenience, member has an option to save the details, as appropriate before finally submitting them to the Exchange.
·         Upon successful submission of the invoice, the member shall receive an on-line confirmation.
·         Exchange shall verify details of the invoices submitted by the LEIPS members such as period of invoice, amount, service tax registration number, etc. and take action, as appropriate. The relevant LEIPS member shall receive an on-line intimation of status of verification performed by the Exchange.
·         On successful verification, the Exchange shall initiate the refund of service tax claim in the designated a/c of the LEIPS member.
·         The service tax refund shall be net of TDS (applicable from time to time).
·         The LEIPS member shall be able to view status of all his requests on-line through the BEFS system.  
10.    To ensure better compliance with service tax regulations, members are requested to submit their service tax invoices within 7 calendar days after the period of the invoice to enable the Exchange to credit eligible service tax refunds.
11.    If a LEIPS member is eligible for more than one payout on a given day, each applicable payout amount shall be separately credited to its designated his account.
12.    The Exchange shall provide an on-line facility to members through the BEFS system (weblink - https://befs.bseindia.com) under the menu section ‘LEIPS’ to view details of incentives paid by the Exchange under various categories. (Please refer to Annexure 1 for illustrative screen)
13.    The LEIPS member can use existing login credentials of BFES system to access LEIPS related functions.
14.    The Exchange has defined the following calendar for computing and disbursing the payouts applicable on end of month basis–

End of Month
Calendar Period
Payment Date
1
26 October – 30 November, 2011
By 07 December, 2011
2
01 December – 30 December, 2011
By 06 January, 2012
3
02 January – 31 January, 2012
By 07 February, 2012
4
01 February – 29 February, 2012
By 07 March, 2012
5
01 March – 30 March, 2012
By 06 April 2012
6
02 April – 25 April, 2012
By 07 May 2012

 
15.    A special cell has been constituted in the Exchange for managing LEIPS payouts and related matters. For any queries related to incentive payment, members are requested to contact the concerned officials of the cell at the numbers given below or send an email on leip.incentive@bseindia.com   
 
1.       Mr Piyush Shelat   022- 2272 8197
2.       Mr. Nikhil Mehta   022- 2272 8374
 
For and on behalf of
BSE Limited
 
 
Rajesh Saraf                                                                                                       Tejash Somaiya      
General Manager – Trading Operations                                                    Manager - Trading Operations 
Attachments
Annexure 1.pdf