ICCL Issues Consolidated Penalty Structure, New Norms For Trading & Position Limit Violations Across Segments

Mumbai: The Indian Clearing Corporation Ltd (ICCL) has issued a consolidated notification outlining the penalties applicable for trading limit and position limit violations across multiple market segments.

This initiative aims to provide greater transparency and uniformity in the treatment of regulatory breaches within the capital markets.

Revised Rules for Trading Limit Violations

For the Equity Cash, Equity and Currency Derivatives segments, ICCL has categorized penalties based on the frequency of violations in a calendar month. The first instance attracts a charge of 0.07 percent per day, while repeated violations lead to incremental fixed penalties, with additional escalation beyond the tenth instance. Members facing frequent breaches may also be referred to the Member Committee for further action.

Securities Lending and Borrowing Segment

In the Securities Lending & Borrowing (SLB) segment, similar structures apply, with initial leniency for the first violation and progressively higher penalties from the second instance onward. Persistent offenders may face referral to the Member Committee.

Position Limit Violations Tightened

For equity derivatives, a 1 percent penalty on the violation value—subject to a minimum of Rs 5,000 and a maximum of Rs 1,00,000 per stock per day—has been prescribed. In currency derivatives, penalties escalate with repeated monthly breaches, and client-level violations attract ₹5,000 per instance per day. The SLB segment follows a similar increasing penalty scale.

Emphasis on Market Discipline

ICCL emphasized that all penalties will be recovered from clearing members, who may recover them from clients responsible for violations. The move is aimed at reinforcing compliance and strengthening market stability.