SEBI fixed daily price limits for non-agricultural commodities in order to ensure fair price discovery and curb price manipulation on exchanges.
Non-agricultural commodities have an aggregate daily price limit (DPL) of up to 9 per cent on both the upper and lower sides. Any price movement on either side beyond the set limits are not permitted.
The aggregate limit is up to 6 per cent for steel and 9 per cent for gold and other non-agri commodities.
With regard to steel, once the trade hits the prescribed initial slab of 4 per cent, DPL will be further relaxed by 2 per cent after a cooling off period of 15 minutes.
During cooling off periods, trading would continue to be permitted within the previous slab of DPL. There would not be further relaxation of DPL during that day.
Regarding gold and other non-agri commodities, once the trade hits the prescribed initial slab (3 per cent), DPL will be further eased by 3 per cent without any cooling off period in the trading.
During cooling off periods, trading shall continue to be permitted within the previous slab of DPL.
Exchanges shall immediately inform Integrated Surveillance Department of SEBI about any such relaxation of DPLs beyond Aggregate DPL, along with all the relevant details and justification.
The move is part of SEBI’s objective of consolidating and updating norms prescribed by erstwhile FMC (Forward Markets Commission).
The Securities and Exchange Board of India (SEBI) started regulating commodities market since September last year, following the merger of FMC with itself.