Sebi to allow mutual funds to trade in commodity derivatives

The Securities and Exchange Board of India (Sebi) may allow mutual funds to trade in commodity derivatives, the capital markets regulator’s executive director SK Mohanty said on Tuesday. “The participation of mutual funds is in an advanced stage of examination,” Mohanty said, while interacting with reporters on the sidelines of a conference on commodities markets organised by Federation of Indian Chambers of Commerce and Industry (Ficci).“We have taken the feedback. On the basis of that, we will finalise the regulatory mechanism,” he said. The executive director said that a decision on allowing mutual funds could be taken in the next six months.

Further, portfolio management services and foreign trading houses that export or import from India could also be allowed to participate in commodity futures, the top official said. In June 2017, the markets regulator had allowed category III Alternative Investment Funds (AIFs) to invest in commodity derivatives. He further said that Sebi will release a consultation paper on allowing a unified commodity and stock exchanges.“The debate is under deliberation – when it should be done,” he said. The markets regulator had earlier brought regulations allowing brokers having different licences for stock and commodity exchanges to consolidate their operations under a unified licence. The Forward Markets Commission, which regulated the commodity derivatives market, was merged with Sebi in 2015.

Securities and Exchange Board of India ( SEBI )