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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Position limit violations

08-Sep-2023 | 131/2023

National Stock Exchange (NSE) has issued a Circular regarding Position Limit Violations, effective from October 3, 2023.

In partial modification to Item 16.7, Item 16 "Violations and Penalty" of NCL Consolidated Circular reference no. 097/2023 (Download Reference no. NCL/CMPT/57320) dated June 28, 2023, the following penalties and additional margin provisions for trading member-wise position limit violations have been specified:

Instances of Position Limit Violations:

1st Instance:

Monetary Penalty: Rs. 5,000/-
Additional Margin: Based on slab-wise percentage breach of applicable position limits.
100% to less than 110%: 5%
110% to less than 125%: 10%
125% to less than 150%: 15%
150% and above: 20%
The additional margin percentage will be levied on (Value of underlying price x Position quantity in breach).
Applicable from the first instance of violation in a calendar quarter.

2nd to 5th Instance:
Monetary Penalty: Rs. 20,000/- per instance from 2nd to 5th instance

6th to 10th Instance:
Monetary Penalty: Rs. 50,000/- per instance from 6th to 10th instance

11th Instance Onwards:
Monetary Penalty: Rs. 1,00,000/- per instance from 11th instance onwards

Additionally, the member will be referred to the Disciplinary Action Committee for suitable action.

The circular further specifies that the 'instances' mentioned above refer to all instances of position limit violations in a calendar quarter for the purpose of levy of penalties. The additional margins levied will be released only at the end of the day if the positions are below the applicable limits.

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