Sebi bans fresh forward contracts in commodities market

The Securities and Exchange Board of India has banned fresh forward contracts in commodities market to curb speculative participation and volatility in prices.However,the existing contracts have been allowed to settle as per the terms of the contracts.The regulator has also reduced the near month position and daily price limits.The near month position limit has been revised to 25% from 50%.At present, in case of agricultural commodity derivatives,client and member level near position limits in any commodity are 50% of their overall position limits for that commodity.The revised near month position limit would be applicable for all the contracts expiring in the month of March 2016 and onwards.DPL(Daily price limits) shall have two slabs- Initial and Enhanced Slab. Once the initial slab limit is reached in any contract, then after a period of 15 minutes this limit shall be increased further by enhanced slab, only in that contract.The trading shall be permitted during the 15 minutes period within the initial slab limit. After the DPL is enhanced, trades shall be permitted throughout the day within the enhanced total DPL of 4%," Sebi said.