Pursuant to SEBI Circular CIR/DNPD/5/2011 dated June 2, 2011 (BSE Notice no-20110602-18, dated June 02, 2011), permitting stock exchanges to introduce Liquidity Enhancement Schemes (LES) for illiquid securities in their equity derivatives segment, the Exchange has launched a series of Liquidity Enhancement Incentive Programmes (LEIPS) with the goal of creating lasting, self-sustaining liquidity in BSE's Futures & Options Segment.
In view of this, Trading Members are hereby informed that the Exchange is launching the 5th programme in the series viz. LEIPS – V on July 27, 2012.
The Programme focuses on single Stock Futures & Options Contracts on 8 underlying viz. State Bank of India, Reliance Industries Limited, ICICI Bank Limited, TATA Steel Limited, TATA Motors Limited, INFOSYS Technologies Limited, Larsen & Toubro Limited & Axis Bank Limited. The programme incentivises both MMs and GMPs by payment of cash for their participation as per prescribed terms & conditions.
Active trading members of Futures and Options Segments of the Exchange who have already signed up in LEIPS-III and LEIPS-IV programme as GMPs shall be treated as GMPs in LEIPS-V programme as well. Trading members who wish to opt out of the LEIPS-V programme as GMPs shall be required to intimate the Exchange of the same.
Registered Market Makers of LEIPS- III & LEIPS- IV programme shall have to register themselves as a Market Maker in LEIPS- V programme & expressly indicate their interest to do Market Making in the underlying securities eligible under LEIPS-V programme.
Other active trading members of Futures and Options Segments of the Exchange can register themselves as a Market Maker (MM) or a General Market Participant (GMP) for this programme as well.
LEIPS-V envisages the MMs to have a continuous quoting obligation with specified size and spread in Single Stock Futures & Options Contracts on 8 underlyings. The programme offers 4 types of incentives to market participants –
· Trading volume based daily cash incentives paid on pro rata basis to MMs & GMPs.
· Quote based incentives for MMs in Stock Options.
· Open Interest (OI) based cash incentives paid on daily basis for average daily OI to MMs and GMPs in Stock Options.
· Lower transaction fees for all active trading members.
Details of LEIPS-V programme are enclosed herewith as Annexure.
For any further clarifications, please contact your designated Relationship Managers.
For and on behalf of BSE Limited.
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Rajesh Saraf
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Sameer Vaze
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GM – Trading Operations
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DM – Trading Operations
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