Now Reading: SEBI mulls FPI, mutual fund entry to deepen commodity derivatives
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SEBI mulls FPI, mutual fund entry to deepen commodity derivatives
SEBI chairman Tuhin Kanta Pandey said on Wednesday the regulator is assessing policy changes to bring FPIs and mutual funds into commodity derivatives to build market depth and attract hedgers. A consultation…
The Story in Brief
SEBI chairman Tuhin Kanta Pandey said on Wednesday the regulator is assessing policy changes to bring FPIs and mutual funds into commodity derivatives to build market depth and attract hedgers. A consultation paper on FPI participation in exchange-traded commodity derivatives was released on Tuesday. Pandey stressed the need for a reliable benchmark price for mutual funds to replace the current close-of-trade system, which he said carried a high probability of manipulation.
The regulator has also submitted proposals to the GST Council Secretariat for a unified IGST model on commodity deliveries, instead of separate state-level SGST registrations for warehouses. On retail safety, Pandey said a detailed analytical report on options trader losses, which will cover not just retail but well-capitalised traders, will be published shortly. He cautioned that expiry day options trading carries severe operational complexity and heavy losses are continuing.
The Indian Opinion
The SEBI chair's push for FPIs and mutual funds in commodity derivatives is sold as 'deepening the market,' but ordinary investors should watch for the fine print. The same regulator that flagged alarming losses on expiry-day options now promises a 'detailed paper' on who is really losing money. That report may settle whether the new rules protect retail or just invite larger predators. The real test: will the new VWAP benchmark actually stop manipulation, or just shift it to a harder-to-detect corner of the trading day? The GST Council's answer on unified IGST for warehouse deliveries will decide if physical settlement ever becomes practical.
Source: legal.economictimes.indiatimes.com
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