Banks and foreign portfolio investors will be allowed to enter the commodity futures market within the next few months, UK Sinha, Chairman of the unified SEBI-FMC regulatory body, said on Monday.
With regulation of commodity derivatives also coming under his purview, Sinha said his immediate priority after merging is to ensure that conduct of the commodity market is “as robust as the securities market.”
In the next few months, SEBI would consider introducing more participants and products in the commodity derivatives market, including allowing banks and foreign portfolio investors to hedge in the market. Products, such as options and index futures would be considered as well, Sinha said.
In May last year, a government committee had said the high cost of transactions in commodity futures could be brought down by allowing banks and foreign investors, who are currently facing policy and regulatory barriers.
Shaktikanta Das, Secretary, Department of Economic Affairs, Ministry of Finance, also voiced the “universal exchange” view when he said it would help eventually create a single platform to trade in all derivatives.
‘Several synergies’
“The merger of regulators will create synergies in terms of margins, settlements, fair practices and fair regulation,” Das said.
For the global investor, Das said, India is one of the lone bright spots in the investment horizon. But that does not mean the country can be complacent. He said a new scheme is being drafted so that companies can float rupee bonds overseas and foreign firms would be allowed to open more project and branch offices here.
This is besides the new draft on indirect taxes – the GST – that is ready to be tabled before Parliament.
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