NATIONAL STOCK EXCHANGE OF INDIA LIMITED

DEPARTMENT : FINANCE & ACCOUNTS

Download Ref No : NSE/FA/28186

Date : November 27, 2014

Circular Ref. No : 6/2014

To all the Trading Members in the Equity ETF
Sub: Liquidity enhancement scheme (LES) for market making in equity exchange traded funds (ETFs) on
NSE Indian indices
The exchange traded funds (ETFs) have been present in the Indian equity markets for over a decade. NSE
has been actively involved in creating awareness about equity ETFs as a simple and efficient asset class.
However, the volume has remained very low affecting the liquidity and increasing the impact cost. In order
to encourage wider participation, it is proposed to introduce an incentive scheme for market making in
equity ETFs on pilot basis. SEBI has recently allowed introduction of LES in respect of ETFs.
The details of scheme are as follows:
The scheme shall be open for all participants, who fulfill the stipulated obligations. The incentives would be
computed and settled on monthly basis. Any participants fulfilling the following obligations shall be treated
as the market maker:

The market participants should provide quotes on both sides (buy/sell) for ETFs on a day for at least
80% of the trading time within the top 10 price points.
The minimum quantity each at buy and sell for each ETF with its maximum permissible bid-ask
spread is specified for all eligible equity ETFs in Annexure 1.
The market participants should fulfill the above condition on at least 90% of the trading days in a
month.

Other Condition:
Equity ETFs for a given trading day will be eligible when the days turnover is above Rs 50 lakh. A
trading day when the equity ETFs turnover is below Rs 50 lakhs, it will be not included for
computation of incentive benefit.
Qualified market makers will be incentivised based on the counter party with which the trade gets executed.
The incentives are as follows:
Rebate Side 1
Zero
Zero
Rs 600 per Crore
Rs 300 per Crore

Side 1
Non Market Maker
Non Market Maker
Market Maker
Market Maker

Side 2
Non Market Maker
Market Maker
Non Market Maker
Market Maker

Rebate Side 2
Zero
Rs 600 per Crore
Zero
Rs 300 per Crore

The scheme shall be effective from December 15, 2014 till February 28, 2015.
For National Stock Exchange of India Limited

Yatrik Vin
Chief Financial Officer

Regd. Office : Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai 400 051

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NATIONAL STOCK EXCHANGE OF INDIA LIMITED

DEPARTMENT : FINANCE & ACCOUNTS
Download Ref No : NSE/FA/28186

Date : November 27, 2014

Circular Ref. No : 6/2014

Annexure 1
ETF Symbol

Underlying Index

RELBANK
BANKBEES
RELCONS
RELDIVOPP
INFRABEES
PSUBNKBEES
KOTAKPSUBK
RELCNX100
ICNX100
CPSEETF
JUNIORBEES
M100
RELGRNIFTY
RELNIFTY
IIFLNIFTY
BSLNIFTY
INIFTY
QNIFTY
M50
KOTAKNIFTY
NIFTYBEES

Bank Nifty
Bank Nifty
CNX Consumption
CNX Dividend Opportunity
CNX Infra Index
CNX PSU Bank Index
CNX PSU Bank Index
CNX100
CNX100
CPSE
Junior Nifty
Midcap
Nifty
Nifty
Nifty
Nifty
Nifty
Nifty
Nifty
Nifty
Nifty

SHARIABEES

Telephone No
26598142

Fax No
26598394

Bid - Ask
Quote Size
250
250
100
100
100
100
100
100
100
100
100
100
250
250
250
250
250
250
250
250
250

Bid - Ask
Spread
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35

250

0.35

Email id
srao@nse.co.in
vneelkan@nse.co.in

Regd. Office : Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai 400 051

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