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Sebi may allow mutual funds to trade in commodity derivatives

Portfolio management services could also be allowed to participate in commodity futures, says S K Mohanty, executive director, Sebi

By: ENS Economic Bureau | Mumbai |
September 27, 2017 1:01:07 am
SEBI, Securities and Exchange Board of India , SK Mohanty, Mutual funds, FICCI, Business news, indian express news The regulator also plans to let even foreign institutional investors after a regulatory framework is put in place.

The Securities and Exchange Board of India (Sebi) is planning to allow mutual funds to trade in commodity derivatives, according to S K Mohanty, an executive director with Sebi.

“The participation of mutual funds is in an advanced stage of examination. We have taken the feedback. On the basis of that, we will finalise the regulatory mechanism,” said Mohanty, on the sidelines of a conference on commodities markets organised by FICCI on Tuesday.

Mohanty also said a decision regarding allowing mutual funds could be taken in the next 6 months. Mohanty said portfolio management services and foreign trading houses that export or import from India could also be allowed to participate in commodity futures.

Such a move will help deepen the market and provide hedging opportunities to large companies. The regulator also plans to let even foreign institutional investors after a regulatory framework is put in place.

In June 2017, the markets regulator had allowed category III Alternative Investment Funds (AIFs) to invest in commodity derivatives. Mohanty further said Sebi will soon release a consultation paper on allowing a unified commodity and stock exchanges.”The debate is under deliberation when it should be done,” he said.

Sebi had earlier brought regulations allowing brokers having different licenses for stock and commodity exchanges, to consolidate their operations under a unified licence.

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