The Security and Exchange Board of India vide its notification dated 23rd March 2021 notified the revised delivery default norms, which shall be in force from the first trading day of May 2021.
In agricultural and nonagricultural commodities, it has been revised that the penalty for delivery default by seller will now be 4 percent and 3 per cent of the settlement price plus replacement cost.
The Clearing Corporations/Exchanges shall have the flexibility to increase/decrease penalty for specific commodities depending on situation, in consultation with SEBI.
In the case of default by a buyer in both agricultural and non-agricultural commodities, Sebi said, clearing corporation need to review the loss incurred by the non-defaulting party, i.e. seller, at its sole discretion, and accordingly, levy a penalty on the defaulting buyer. However, such penalty should be within the overall cap of delivery margins collected by the clearing corporations, from such defaulting buyer.
