Sebi on Monday rationalised margin framework for the commodity derivatives segment, wherein clearing corporations will have to categorise commodities according to their realised volatility.
In addition, clearing corporations have been asked to prescribe floor values of initial margin as well as margin period of risk (MPOR) depending upon their categories, Sebi said in a circular.
Given the wide variation of liquidity and volatility among different commodity derivatives, the regulator in consultation with other stakeholders has decided to rationalise the margin system.
Under the framework, clearing corporations have been asked to categorise their commodities by volatility — low, medium and high — based on the realised volatility for the past three years.
Related party deals
A Sebi-appointed panel has proposed sweeping changes to strengthen the monitoring and enforcement of norms pertaining to related party transactions (RPT).
Tweaking the definition of related party and related party transactions and revising thresholds for classification of such transactions as material, are among the recommendations. Also, the process followed by a company’s audit committee for approval of RPTs that are material will change.