Sebi chief bats for deeper commodity markets, seeks inputs

Regulator Sebi today sought inputs from market intermediaries trading in commodity derivatives on new products as well as widening the markets by bringing in more participants such as foreign investors.
In a meeting with commodity brokers and participants, Sebi Chairman U K Sinha discussed various issues to deepen the commodities market and asked the intermediaries to submit a detailed plan on the same.
The Securities and Exchange Board of India (Sebi) began regulating commodities markets in September 2015 following the merger of erstwhile watchdog Forward Markets Commission (FMC) with it.
According to sources present in the meeting, Sebi is now looking into ways to improve liquidity in the commodities markets, including introduction of new products and bringing in more investors.

"We have suggested that more participants such as FPIs should be brought in for commodity derivative trading and that Sebi should make the environment conducive for them to trade in this segment," a commodity broker told PTI.
The brokers also suggested launching new products in commodity derivative trading.

With regard to introduction of options in commodity derivative trading, market participants suggested Sebi chief to introduce 'options' only for liquid contracts as well as not differentiate between agricultural and non-agricultural commodities, another broker said.
Sinha informed the brokers they would be allowed to trade in commodities as well as securities from the same broking platform.

The move would help investors as the procedure for brokers is same with regard to equities and commodity derivative trading activities.
The conclave was attended by brokers, participants as well as a few corporates engaged in commodity trading.
Sinha has lately been meeting with various market intermediaries, including equity brokers and mutual funds, to look into ways to strengthen the markets.