Sebi analyzing place limits for non-agri contracts to spice up liquidity
Talking about reforms within the commodity derivatives market, Pandey stated the market design ought to permit contracts to achieve scale. In some agricultural commodities, bodily settlement from the outset can impede market improvement, and a phased strategy may permit contracts to mature earlier than bodily settlement turns into necessary.
He stated Sebi has accomplished consultations on the matter and tips will comply with.
The regulator can be working to cut back structural friction in commodity markets, together with participating with stakeholders on GST-related points affecting individuals who give or obtain commodities via change platforms.
Pandey stated expertise ought to serve the particular wants of commodity markets, which embrace producers, industrial customers, farmers, processors and bodily hedgers.
“Know-how can enhance entry and effectivity, however its design should mirror their wants whereas preserving truthful entry and market integrity,” he stated at an occasion organised by CPAI (Commodity & Capital Market Members Affiliation of India).
On investor consciousness, Pandey stated Sebi will strengthen efforts underneath Undertaking Jagrook to unfold consciousness about commodity derivatives amongst farmers, farmer producer organisations (FPOs), MSMEs, hedgers and different market customers.”Entry with out understanding just isn’t inclusion,” he stated, stressing the necessity for individuals to grasp each the utility and dangers related to commodity derivatives.
Sebi can be working in the direction of deeper and extra liquid money markets, 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 markets.
Pandey stated easier regulation mustn’t imply weaker compliance, and sturdy controls over consumer funds, margins, reporting and supervision stay elementary.
“Belief and market integrity” should not be compromised, he added.
Final month, the Sebi board authorised a proposal to permit international portfolio traders (FPIs) to take part in bodily settled, non-agricultural commodity by-product contracts, topic to safeguards.
