Sebi reviews portfolio managers norms for commodity markets

Markets regultaor Sebi today said it is reviewing norms to allow portfolio managers in the commodity markets.
The Securities and Exchange Board of India (Sebi) further said that currently Portfolio Manager Services (PMS) would not be permissible in the commodity markets.
"Sebi is currently reviewing norms with regards to participation in commodity derivatives market," the regulator said in a circular adding "PMS currently would not be permissible in the commodity derivative market."
The regulator has directed all commodity exchanges to treat a defaulter at any one of them as a defaulter on all the bourses.
"Immediately on receipt of the information about default of a member, the other stock exchange/clearing corporation shall declare the said member defaulter on all its segments," the regulator said.

To promote transparency in the markets, the exchanges will have to disclose on their websites about position of top 10 trading clients in buy side as well as sell side in order of maximum open interest in anonymous manner every day after the end of trading session.

Besides, they would have to make disclosure about delivery intent of the hedgers on a daily basis, pay-in and pay-out of commodities made by top 10 clients including hedgers 10 days after completion of settlement, for the information of the market, members' proprietary position on monthly basis.
They would have to disclose about members whose request of surrender has been approved by the exchange, along with date of approval, break up of funds contributed into Settlement Guarantee Funds.

The regulator also issued guidelines with regard to position limits for all commodity derivatives, clubbing of open positions, penalties for violation of position limits apart from prescribing numerical limits for each commodity.
Sebi had started regulating commodity markets after the merger of Forward Markets Commission (FMC) with the markets regulator in September last year.
This circular is being issued to consolidate and update norms prescribed for commodity bourses by erstwhile FMC.