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Consultation Paper On Permitting Mutual Funds & Portfolio Managers To Participate In Commodity Derivatives Market

SEBI, 07-Dec-2017: The objective of the consultation paper is to seek comments / views from the public on the proposal of permitting Mutual Funds (MFs) and Portfolio Managers (PMs), who are authorized under an agreement to invest on behalf of their clients, for participation in exchange traded commodity derivatives and to determine an ideal regulatory framework for the proposal.

The above mentioned Consultation paper is available at SEBI site - download here

Comments from public are invited on the proposal contained in this paper, latest by December 31, 2017. The comments regarding Mutual Funds may be sent by email to mfcomments@sebi.gov.in and the comments regarding Portfolio Managers may be sent to pms@sebi.gov.in.


Comments/ suggestions may kindly be provided in the format given below:

SEBI Consultation Papers

Background:
  • The Indian Commodity Derivatives Market has been running without any institutional participation thereby lacking the desired liquidity and depth, which is one of the key elements for the efficient price discovery and price risk management. In past, various committees have recommended for participation of institutional investors in the commodity derivatives markets, which would help in improving the quality of price discovery, thereby leading to better price risk management.
  • SEBI constituted an advisory committee known as Commodity Derivatives Advisory Committee (CDAC) to advise SEBI for effective regulation and development of the commodity derivatives market. CDAC has advised that the commodity derivatives market should be opened up to institutional participation i.e. both domestic as well as international in a phased manner.
  • Recently, SEBI has permitted Category-III Alternative Investment Funds (AIF), to participate in the Commodity Derivatives Market.
  • SEBI has also held series of meetings with various stakeholders to discuss the issues relating to participation by MFs and PMs in the Commodity Derivatives Market.

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