Pursuant to SEBI Circular CIR/DNPD/5/2011 dated June 02, 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 Derivative Segment.
On this background, Trading Members are hereby informed that the Exchange is launching the 7th programme in the series viz. LEIPS – VII on October 29,2012. The Programme focuses on Options Contracts on BSE SENSEX Index.
The programme incentivises both MMs and GMPs by payment of cash for their participation as per prescribed terms & conditions.
Active trading members of Derivative Segments of the Exchange who have already signed up in LEIPS-IV,LEIPS-V and LEIPS-VI programme as GMPs shall be treated as GMPs in LEIPS-VII programme as well. Trading members who wish to opt out of the LEIPS-VII programme as GMPs shall be required to intimate the Exchange of the same.
Registered Market Makers of LEIPS-IV,LEIPS-V and LEIPS-VI programme shall have to register themselves as a Market Maker in LEIPS- VII programme & expressly indicate their interest to do Market Making in the underlying Index eligible under LEIPS-VII programme.
Other active trading members of Derivatives Segments of the Exchange can register themselves as a Market Maker (MM) or a General Market Participant (GMP) for this programme as well.
LEIPS-VII envisages the MMs to have a continuous quoting obligation with specified size and spread in Futures & Options Contracts on BSE SENSEX Index. The programme offers 4 types of incentives to market participants –
1. Trading volume based daily cash incentives to MMs & GMPs.
2. Quote based incentives for MMs in Index Options.
3. Open Interest (OI) based cash incentives paid on daily basis for average daily OI to MMs and GMPs
4. Lower transaction fees for all active trading members.
Details of LEIPS-VII 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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