NSE tightens derivatives norms
Mumbai: The National Stock Exchange is tightening the screws on traders. Two days after hiking the exposure margins in derivatives, the NSE further tightened the regulations in the derivative segment by asking members to ensure that the client level positions on a gross level are not breached on individual stocks.

The NSE said the gross open position across all derivative contracts on a particular underlying of a client should not exceed one per cent of the free float market capitalisation (in terms of number of shares). Also, it should not exceed five per cent of the open interest in the derivative on a particular underlying stock (in terms of number of contracts).

The new limits will come into effect from May 9.

In simple terms, the regulations stipulated that clients do not breach the ceiling with a trading member while he/she could go ahead and further build up positions with another member.

In the event of violation, the members are asked to ensure that the client does not take fresh positions and if required, reduce the position of such clients within permissible limits.

The circular also imposed stiff penalties on clearing members for every day of violation. This will be one per cent of the value of the quantity in violation (i.e., in excess quantity over the allowed quantity, valued at the closing price of the underlying stock) per client or Rs1 lakh per client, whichever is lower, subject to a minimum penalty of Rs5,000 per violation per client.
Back to News Review index page  

Pru ICICI to launch equity and derivative fund
Kolkata: Prudential ICICI MF is planning to introduce an open-ended fund for tapping arbitrage opportunities and pursuing derivative strategies. The fund will offer investors two plans - income optimiser and wealth optimiser.

The plans under the proposed Prudential ICICI Equity and Derivatives Fund will involve a mix of equity and equity-related securities, derivatives including index futures, stock futures, index options and stock options as well as debt and money market instruments.

The income optimiser plan, which will seek to ensure safety of principal by minimising credit risk, will try to provide stable and low volatility returns by employing arbitrage and other derivative strategies in the equity markets as well as investments in short-term debt, the offer document sent to SEBI has mentioned.

The plan may invest 20-35 per cent in debt, while equity and equity derivatives may account for 65-80 per cent of the corpus. Un-hedged equity exposure will be limited to five per cent of the overall portfolio, while exposure to securitised debt will not exceed 50 per cent of the total debt component.
Back to News Review index page  

Prajay makes allotment to Citigroup
Hyderabad: Prajay Engineers Syndicate has allotted 1,21,013 equity shares of Rs10 each fully paid-up at a conversion price of Rs75 per share to Citigroup Global Markets Mauritius Pvt Ltd.
Back to News Review index page  

R Systems opens at 20 per cent premium
Mumbai: Outsourcing software development company R Systems International, debuted on the stock exchanges at a premium of 20.4 per cent on the BSE at Rs301, compared to the issue price of Rs250. After high volatility the shares closed flat at Rs249.75.
During the day, the shares hit the day's high of Rs325 and a low of Rs234.

On the NSE, the shares were listed at Rs285, a premium of 14 per cent from the issue price, but it closed flat at Rs250.15.
Back to News Review index page  

PVR Cinemas to raise $20mn
Mumbai: Shringar Cinemas has issued $20 mn worth Foreign Currency Convertible Bonds In order to raise funds for the expansion and modernisation of its multiplexes and food court business.

The 20 million dollar five-year FCCBs were issued in two tranches of 12 million dollar and 8 million dollar, Shringar Cinemas informed the Bombay Stock Exchange.

Rabobank International was the manager and advisor to the issue, it added.

Shringar Cinemas shares closed at Rs69.25, up 0.65 per cent at the BSE.
Back to News Review index page  

NSE likely to revise F&O lots
Mumbai: Retail investors can rejoice at the news that stock exchanges are planning to revise the market lots.

Last year, market lots of derivative products were revised in the April and May. Currently, the contract size or the value of 90 per cent contracts is over 1-4 times higher than the prescribed minimum value of Rs2 lakh each. The minimum value of a contract on a particular day is determined by multiplying the market lot by the closing price of the underlying security on that day.
Back to News Review index page