The National Stock Exchange (NSE) on November 01, 2023, issued a circular regarding the Liquidity Enhancement Scheme Silver Options (Option in Goods)
This has a reference to the NSE circular NSE/COM/45445 dated August 21, 2020, where it has announced the introduction of option in goods contracts on underlying Silver
The following has been stated namely: -
• It states that it has now introduced LES in Silver Options with effect from November 27, 2023, to encourage active participation in trading and market development.
• The salient features of the Liquidity Enhancement Scheme (LES) have been stated as follows namely: -
(i) The Trading members who are interested in providing continuous quotes as Market Makers shall be required to register with the Exchange. Members registered as Market Makers shall be required to fulfill order-level obligations as specified in this circular.
(ii) The eligibility criteria for Market Makers are as given below:
(a)Net worth of 1 Crore
(b)No serious disciplinary action against the member in the last year
• The exchange will appoint three market makers (MM1, MM2, and MM3) for the Silver (30 kgs) Option in Goods contract based on a competitive bidding procedure.
• The successful bidder shall be appointed as MM till the scheme for the product remains in force.
• The interested applicants can submit their bids in the format specified (as per Annexure I) on or before November 16, 2023, to become eligible for being appointed as the designated market makers. Based on the bids received, NSE would evaluate bids as per the grading scale given in Annexure II
• A trading member may apply to be a designated market maker only under one category i.e., either Market Maker 1 Market Maker 2, or Market Maker 3.
[Circular No. NSE/COM/59196]
