Sebi issues draft norms for allowing futures in commodity indices

BSE and NSE will not immediately qualify for index futures going by the regulator's proposed criteria

Securities and Exchange Board of India (Sebi) on Wednesday issued a consultation paper to allow trading in commodity-index-based futures. So far, only individual commodity futures and options on it were allowed. However, Sebi has proposed allowing investors, small and medium-sized enterprises, mutual funds and institutional investors to trade in commodity index futures, to begin with.
 

The regulator has also fixed the criteria, from a liquidity and volume point of view, for the constituents of the index. 

Index futures in commodities are usually traded by institutions and those businesses that deal with a class of commodities or have to deal with