Regulator SEBI is mulling allowing institutional investors in a phased manner in commodity derivatives and may soon permit options trading in this market. The proposals in this regard are likely to be placed before Sebi’s board later this month, along with other reform measures for IPOs, stock exchanges and mutual funds among other segments, sources said.
Investors, exchanges and other market participants have been demanding options trading in commodity derivatives for a long time as well as allowing institutional players like banks in such markets. This would be the first board meeting under the chairmanship of Ajay Tyagi, who took charge as Sebi chief on March 1.
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Last month, Tyagi said that Sebi is focusing on deepening of the commodities derivatives market and integration of farmers and spot markets with it.
To a question on whether there are legal issues in introduction of options trading, he had said, “Details of the contract are being worked out and then it will go to the Sebi board (for approval). Law does not require any amendment but some tweaking is needed and that will be done.” Asked about new products, Tyagi had said soyabean contracts have been introduced while future trading in diamond would be launched soon.
