Markets regulator the Securities and Exchange Board of India (Sebi) has directed commodity exchanges to form a product advisory committee (PAC) for each group or complex of commodities within a month to bring transparency in the designing process of commodity derivatives contracts.
In a circular dated August 7, Sebi asked commodity exchanges to form committees for each product or a group of products within a month, comprising member exchanges, trade associations, traders and value chain participants.
The committee should mandatorily meet at least twice a year or more frequently depending upon the requirement and give recommendations to their respective exchanges.
The respective exchange, according to the Sebi circular, will set the agenda of the meeting and publish details of the committee and its recommendations.
The regulator, however, has left it to the exchange to accept, modify or reject the recommendations of the committee.
Every committee will be chaired by an independent person with experience in the specific commodity and will be supported by a vice chairman from the exchange.