Sebi proposes to allow MFs and portfolio managers in commodity derivatives

This is the second move by Sebi to allow institutional participants in the commodity derivatives market

The Securities and Exchange Board of India (Sebi) proposes to permit mutual funds (MFs) and portfolio managers (PMs) to participate in exchange-traded commodity derivatives. 

On Thursday, it issued a consultation paper on this, seeking reactions by the end of this month — on allowing them, how and a possible regulatory framework. 

This is the market regulator's second move to allow institutional participants in commodity derivatives. Earlier, it had decided to allow category-III alternative investment funds or hedge funds. Allowing MFs and PMs would be a second move in the direction of broadbasing the commodity derivative segment, to improve liquidity and permit institutional