14 hrs ago
Sebi Reviews Non-Agricultural Limits to Boost Commodity Market Liquidity
Sebi is looking at changing limits for some non-agricultural commodity contracts.
It hopes this will make trading easier and markets deeper.
The regulator says safety rules must remain strong.
For some farm-related contracts, it may be better to wait before requiring physical delivery.
Sebi says it has finished asking for views and will issue guidelines later.
It is also discussing tax-related problems with market participants.
The regulator wants to help farmers and other users understand both the benefits and risks of these contracts.
Sebi says market trust and fairness must be protected.
Sebi is examining position limits for non-agricultural contracts to improve liquidity and market depth while maintaining risk controls.
Chairman Tuhin Kanta Pandey said guidelines will follow after consultations on the matter were completed.
Sebi is considering a phased approach to physical settlement for some agricultural contracts so they can mature first.
The regulator is discussing GST-related issues and plans to strengthen commodity-derivatives awareness through Project Jagrook.
Sebi also aims to deepen cash markets, while keeping controls over client funds, margins, reporting and supervision robust.
- Who
- Sebi chairman Tuhin Kanta Pandey and the Securities and Exchange Board of India.
- What
- Sebi is reviewing position limits for non-agricultural contracts and considering other commodity-market reforms.
- Where
- At an event organised by the Commodity & Capital Market Participants Association of India; the city was not specified.
- When
- Pandey made the remarks on Saturday; no date was specified.
- Why
- To improve liquidity and market depth while preserving risk controls, fair access and market integrity.
Key facts
- Position limits
- Sebi is examining limits for non-agricultural contracts.
- Consultations
- Pandey said consultations were complete and guidelines would follow.
- Physical settlement
- For some agricultural commodities, Sebi is considering allowing contracts to develop before physical settlement becomes mandatory.
- GST issues
- Sebi is engaging stakeholders on GST-related issues affecting commodity-market participants.
- Investor awareness
- Sebi plans to strengthen Project Jagrook awareness efforts for farmers, FPOs, MSMEs, hedgers and other users.
- FPI participation
- Last month, the Sebi board approved a proposal allowing foreign portfolio investors to participate in physically settled non-agricultural commodity derivative contracts, subject to safeguards.
Quotes
Tuhin Kanta Pandey
Sebi chairman
“Technology can improve access and efficiency, but its design must reflect their needs while preserving fair access and market integrity.”
financialexpress.com
“Access without understanding is not inclusion.”
financialexpress.com
Sources
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