Pursuant to the launch of Commodity Derivatives Segment on October 01, 2018, trading members are advised to refrain themselves from entering into non-genuine trades and ensure due-diligence while trading.
Abnormal / Non-genuine trades described as:
“Instances wherein the buy and sell transactions have been executed in / by the same sets of parties, on the Exchange, at abnormally high prices differences which are not co-related to the spot / futures price movement in the underlying commodity. This is particularly true with illiquid contracts. Such trades maybe between different entities (client / own account) within same member or different members.”
The abnormal / non-genuine trades are executed by the market participants primarily with an objective of transferring profit / loss between the concerned entities. In view of the same, penalty of 100% of the profit made / loss incurred / transferred as a result of abnormal trades / non-genuine trades shall be levied to the concerned member/s.
The decision whether a trade or trades is / are abnormal / non-genuine shall be of the Exchange which would be final and binding.
The Exchange may also consider to take appropriate disciplinary actions against the concerned member for multiple instances of such abnormal / non-genuine trades as per the Rules, Bye-Laws and Regulations of the Exchange.
Further members please note that, the Exchange reserves the right to consider any other criteria or trading pattern and other circumstantial evidence to identify other forms of market abuses and may consider to impose penalty and / or take additional disciplinary actions in accordance with the Rules, Bye-Laws and Regulations of the Exchange.
Members are advised to be extremely cautious and refrain from executing / allowing such trades, which do not appear to be genuine, in their own account and / or for their Clients. Members are further advised to have appropriate internal systems and controls at their end to ensure that such orders / trades are not entered / executed from their trading terminals.
The provisions of this circular shall be applicable with effect from November 19, 2018.
In case, trading members require any clarification, they may please contact on 022-22725092/5002.
For & on behalf of BSE Ltd.
Usha Sharma Umesh Hanjankar
Addnl. General Manager Asst. General Manager
Surveillance Surveillance
November 16, 2018 |