Sebi Board meet: Commodity derivatives market open to FPIs

Opening up the Indian markets additional to international gamers, the Securities and Exchange Board of India (Sebi) on Wednesday allowed international portfolio buyers (FPIs) to commerce within the commodity derivatives markets.

The Sebi Board, which met on Wednesday, took the choice to permit FPI buying and selling in commodity derivatives at a time when FPIs are pulling out from the inventory markets.

The regulator stated any FPI desirous of taking part in Indian commodity derivatives with or with out precise publicity to Indian bodily commodities can accomplish that by way of the FPI route. FPIs can commerce in all non-agricultural commodity derivatives and some choose broad agricultural commodity derivatives, it added.

To start with, FPIs shall be allowed solely in cash-settled contracts. Sebi stated place limits for FPIs (aside from people, household places of work and company our bodies) shall be at par with these presently relevant for mutual fund schemes as a consumer.

FPIs belonging to classes comparable to people, household places of work and corporates shall be allowed a place restrict of 20 per cent of the client-level place restrict in a selected commodity derivatives contract, just like the place limits prescribed for forex derivatives.

Currently, institutional buyers comparable to Category III AIFs, Portfolio Management Services and mutual funds are allowed to take part within the Indian commodity derivatives market.

A Working Group comprising of representatives from the SEBI and market contributors has additionally been constituted to assessment and study whether or not any further danger administration measures, are required to be prescribed for FPIs.