Commodity trade entry by banks, insurers on table

NEW DELHI: Stock market regulator Sebi is working with RBI and the insurance regulator to enable participation of banks and insurance companies in commodities derivatives markets, its chairman Tuhin Kanta Pandey said on Saturday.

Working groups have also been set up to suggest measures to deepen the Agri Commodity Derivatives ecosystem, he said. Among other things, these expert groups are reviewing whether the regulatory framework pertaining to margins, position limits, and delivery and settlement mechanisms can be optimised without affecting market integrity.

"Their recommendations will assist us in taking necessary developmental measures after due consultation with all stakeholders," the Sebi chairman said while addressing a conference in the national capital.

He said the working group for reviewing the non-agri commodity derivatives segment will be notified shortly.

"As we look to the future, commodity markets and their participants will be high on our regulatory and developmental agenda," Pandey said.

Sebi will continue engaging with govt to resolve GST-related issues for participants who wish to receive or deliver commodities through the Exchange platform.

Elaborating on awareness and outreach, Pandey said a Sebi investor survey has highlighted the need for targeted awareness and education programmes. Sebi's awareness programmes were being targeted at Farmer Producer Organisations (FPOs), exporters and importers, students and faculty members of agricultural colleges, hedgers and MSMEs.

Outreach programmes are being conducted with FPO representatives to identify the challenges faced by them in accessing the market, Pandey added.

Domestic markets offer regulated gold products, including through commodity derivatives, Gold ETFs and Electronic Gold Receipts (EGRs). The Sebi chairman said that these regulated products ensure investor protection. EGRs were meant to create a regulated market for gold trading and establish India as a global price setter for gold.

"While the EGR framework may need a review, I urge the industry to educate its participants and investors to deal only in regulated gold products," said Pandey.


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