Sebi analyzing place limits for non-agri contracts to spice up liquidity
Speaking about reforms within the commodity derivatives market, Pandey mentioned the market design ought to enable contracts to achieve scale. In some agricultural commodities, bodily settlement from the outset can impede market improvement, and a phased method might enable contracts to mature earlier than bodily settlement turns into necessary.
He mentioned Sebi has accomplished consultations on the matter and pointers will comply with.
The regulator can also be working to cut back structural friction in commodity bourses, together with partaking with stakeholders on GST-related points affecting members who give or obtain commodities by alternate platforms.
Pandey mentioned know-how ought to serve the particular wants of commodity bourses, which embrace producers, industrial customers, farmers, processors and bodily hedgers.
“Technology can enhance entry and effectivity, however its design should mirror their wants whereas preserving honest entry and market integrity,” he mentioned at an occasion organised by CPAI (Commodity & Capital Market Participants Association of India).
On investor consciousness, Pandey mentioned Sebi will strengthen efforts below Project Jagrook to unfold consciousness about commodity derivatives amongst farmers, farmer producer organisations (FPOs), MSMEs, hedgers and different market customers.”Access with out understanding is just not inclusion,” he mentioned, stressing the necessity for members to know each the utility and dangers related to commodity derivatives.
Sebi can also be working in the direction of deeper and extra liquid money bourses, with wider participation, stronger securities borrowing and lending, and environment friendly hedging and arbitrage anticipated to enhance value discovery and strengthen the interplay between money and derivatives bourses.
Pandey mentioned easier regulation shouldn’t imply weaker compliance, and strong controls over shopper funds, margins, reporting and supervision stay elementary.
“Trust and market integrity” should not be compromised, he added.
Last month, the Sebi board permitted a proposal to permit overseas portfolio traders (FPIs) to take part in bodily settled, non-agricultural commodity by-product contracts, topic to safeguards.
