SEBI revises Guidelines for Liquidity Enhancement Scheme in Equity Cash and Equity Derivatives Segments [Read Circular]

SEBI - guidelines for Liquidity Enhancement Scheme - Equity Cash - Equity Derivatives Segments - Taxscan

The Securities and Exchange Board of India has notified the revised guidelines for Liquidity Enhancement Scheme in the Equity Cash and Equity Derivatives Segments.

Initially, on April 23, 2014, SEBI had issued circular permitting stock exchanges to introduce liquidity enhancement schemes in the equity cash and equity derivatives segments to enhance liquidity in illiquid securities. Observing the stock exchanges, SEBI has decided to modify clauses 3.1 and 4.1 of said Circular in the following manner:

The Scheme shall have prior approval of the Governing Board of the Stock Exchange which will be valid for one year. The Governing Board of the Stock Exchange may give yearly approval till the time the scheme is in operation. Further, its implementation and outcome shall be monitored by the Governing Board at quarterly intervals.

The Stock Exchange shall introduce liquidity enhancement schemes on any security. Once the scheme is discontinued, the scheme can be re-introduced on the same security.

These changes shall also be applicable to existing schemes. Other conditions prescribed in aforesaid SEBI Circular dated April 23, 2014 shall remain unchanged.

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