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 day’s 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 maker’s 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 [email protected] [email protected]

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

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