Sebi to set up working group to review non-agricultural commodity derivatives

Markets regulator Sebi is planning to constitute a working group to review the non-agricultural commodity derivatives segment, its chairman Tuhin Kanta Pandey said.

He added that the working group will be notified shortly. Pandey said Sebi is also engaging with the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (IRDAI) to enable the participation of banks and insurance companies in the commodity derivatives market. According to him, enhanced institutional participation will bring in higher liquidity, making the market more attractive for hedging purposes.

“After due consultation with all stakeholders, we are going to form another working group to review the non-agricultural commodity derivative segment. “This working group will be notified very shortly,” the Sebi chief said. Pandey said Sebi has already set up working groups to suggest measures to deepen the agriculture and commodity derivatives ecosystem.

These expert groups are examining, among other aspects, whether the existing regulatory framework governing margins, position limits, and delivery and settlement mechanisms can be optimised without compromising market integrity. He said the recommendations of these groups would help the regulator take necessary developmental measures.