Commodity market sees big liquidity push with mutual fund foray

Mutual funds and portfolio management services (PMS) providers’ entry into the commodities derivatives segment will give a big boost to the derivatives market, especially in terms of liquidity. 

It will help raise hedging, especially by producers, and improve depth and liquidity in far-month co­n­tracts. Initially, mutual fund ho­u­ses and will go slow to understand the market first but are optimistic about the opportunities bei­ng thrown open by the regulator.

The board of the Securities and Exchange Board of India (Sebi) has approved a proposal to allow MFs, regulations for which are being prepared. 

But the department of financial services under