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Sebi rolls out daily price limits framework for commodity futures contracts
Capital markets regulator Sebi on Tuesday came out with a new framework for daily price limit for commodity futures contracts in a bid to resolve the difference in closing price at domestic exchange and global bourse.
The Daily Price Limits (DPLs) define the maximum range within which the price of a commodity futures contract can move in one trading session. Such limits protect investors from sudden and extreme price movements and provide a cooling-off period to re-assess the information and fundamentals impacting the price of the commodity futures contract.
The Indian bourses have informed that closing price on domestic exchange differs from closing price on international exchanges, after necessary currency conversion, because of a difference in methodology of calculation of closing price, the Securities and Exchange Board of India (Sebi) said in a circular.
Due to such differences in closing price, the aggregate DPL range on domestic exchange may lag behind (either upwards or ..