Performance review of the commodity derivatives contracts by Recognised Stock Exchange

SEBI vide circular No. SEBI/HO/CDMRD/DNPMP/CIR/P/2020/21 dated 04thFebruary, 2020 it has been decided to have a  framework to evaluate the performance of Derivative contracts based not merely on statistics regarding delivery and trade volumes but also on the strength of a  comprehensive empirical assessment after considering all relevant information,   pertaining   to the performance of a derivative contract during the relevant period of time.

Framework for performance review is as follows:

  • All recognized stock exchanges shall review the performance of all contracts traded on their exchanges,  in the commodity derivatives segment, as per the parameters laid down in the Circular.
  • It shall be consulted with the  Product  Advisory Committee     (PAC).
  • The performance review along with the methodology adopted in evaluation, if any, shall be disclosed by the stock exchanges on their website prominently.
  • It shall be conducted on an annual basis for each financial year and shall be disclosed by 30th June of the following financial year.

This Circular would be effective from April 01, 2020. The stock exchanges shall be required to undertake and disclose performance review of all contracts traded on their exchange from FY 2019-20

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