Media Release
BSE review of Minimum Contract Size in Equity Derivatives Segment
Mumbai, July 21, 2015: In continuation of Exchange notice number 20150713-29 regarding Review of Minimum Contract Size in Equity Derivatives Segment whereby SEBI vide its circular CIR/MRD/DP/14/2015 dated July 13, 2015 has informed stock exchanges to increase the minimum contract size in equity derivatives segment to Rs. 5 lakhs effective from the next trading day after expiry of October 2015 contracts i.e October 30, 2015.
In the view of the above, trading members are requested to take a note of the following:-
ü The lot size for derivatives contracts in equity derivatives segment shall be fixed in such a manner that the contract value of the derivative on the day of review is within Rs. 5 lakhs and Rs. 10 lakhs.
ü For Stock Derivatives if the market lot is not less than 50 then the lot shall be in multiples of 25.
ü However, if the contract value of the stock derivatives at the minimum lot size of 50 is greater than Rs. 10 lakhs, then lot size shall be fixed in a multiple of 5, provided the lot size is not less than 10.
ü For Index Derivatives the lot size (in units of underlying) shall be fixed as a multiple of 5, provided the lot size is not less than 10.
ü Standardization of lot size shall be carried out every six months based on the average of the closing price of the underlying for last one month.
ü The lot size revision will be carried out by giving an advance notice of at least two weeks to the market.
ü If the revised lot size is higher than the existing one, it will be effective only for new contracts.
ü If the revised lot size is lower but not in multiple of the existing one, it will be effective only for new contracts.
ü Review of market lot of Equity Derivatives contracts shall be carried out by the Stock Exchanges in consultation with each other for an underlying traded across the Exchanges.
ABOUT BSE:
BSE (formerly Bombay Stock Exchange Ltd.) – Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange Ltd.), is Asia’s first Stock Exchange and one of India’s leading exchange groups and has played a prominent role in developing the Indian capital market. BSE is a corporatized and demutualised entity, with a broad shareholder-base which includes two leading global exchanges, Deutsche Bourse and Singapore Exchange as strategic partners. BSE provides an efficient and transparent market for trading in equity, debt instruments, equity derivatives, currency derivatives, interest rate derivatives, mutual funds and stock lending and borrowing. BSE also has a dedicated platform for trading in equities of small-and-medium enterprises (SME). BSE provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. It has a global reach with customers around the world and a nation-wide presence. BSE systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments. Indian Clearing Corporation Limited, the wholly owned subsidiary of BSE, acts as the central counterparty to all trades executed on BSE platform and provides full novation guaranteeing the settlement of all bonafide trades executed on the BSE Platform. BSE Institute Ltd, a fully owned subsidiary of BSE, runs one of the most respected capital market educational institutes in the country. Central Depository Services Ltd. (CDSL), a subsidiary of is one of the two central depository services in India.
Yatin Padia – 022 2272 8516 Marketing Communications
yatin.padia@bseindia.com
July 21, 2015