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Sebi has revised the DPL for broad and narrow commodity contracts into two slabs -- initial slab is 4%, which if breached will be enhanced by 2% after a cooling off period of 15 minutes only in that contract. During the cooling off period trading will be permitted within the initial slab.
For sensitive commodities, the initial slab is 3% followed by 1% enhanced slab. The aggregate DPL for the first two contracts is 6% and that of the sensitive commodities is 4%.
After the DPL is enhanced trading will be permitted within the enhanced aggregate DPL. For non agri goods -- energy, metals and precious metals -- Initial slab is 6% followed by enhanced slab of 3% with aggregate DPL at 9%. Since these contracts mirror international contracts , trading beyond aggregate DPL of 9% is allowed .
For gems and stone , like diamond, aggregate DPL is 6% while for other non agri goods is 9%. In both these categories, trading beyond DPL is disallowed.
"Relaxing DPL results in better price discovery based on supply demand," said an exchange source on condition of anonymity. "The move is a good one."
In international commodities like gold, crude , etc if initial slab is breached in international markets during or after market hours in event of excess volatility , the domestic exchange can relax DPL directly by informing the market and the integrated surveillance department of Sebi .
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