New Delhi, April 26, 2017

Securities market watchdog Sebi on Wednesday approved trading in commodities options on the bourses.

In a fresh round of market reform push, Sebi Chairman Ajay Tyagi said the market regulator was keen on expanding the commodities derivative segment.

Sebi also allowed instant access facility for mutual funds via e-wallets and payment banks and said the market regulator wants to see deepening of MF penetration in the country.

The market regulator also okayed preferential allotment for scheduled banks to address NPA issues.

“NBFCs with over Rs 500 crore net worth can now participate in QIPs,” the market regulator said.

Sebi has also decided to form a panel to monitor use of IPO proceeds of Rs 100 crore and above.

Tyagi said FPI FAQs to be made into regulations for plugging loopholes on NRIs using P-notes and clarified that NRIs cannot participate in the Offshore Derivative Instruments.

The Sebi chief said the regulator would complete the pending issues, including NSE algo trades, within a specific time frame. He said Sebi will decide on approval for NSE MD & CEO soon.

He, however, said the clearance to the NSE IPO would take some time as the market regulator has sought some additional information on the issue.

The regulator also announced a single licence regime for equity and commodity brokers, ET Now reported, quoting sources.

Besides, the regulator also approved regulations for monitoring IPO funds of up to Rs 500 crore.

In February, Sebi had sought legal clarity on its existing rules before allowing options trading in commodities derivatives.

There were three alternatives, ET reported in February, on how settlement should take place: in physical delivery or in cash or should it be settled on price discovery.

“The consensus view is that we should get along with the third option, which is price discovery. That means settlement should take place based of future price of that derivative. Legally, we are examining if it can be done by amending the regulations of Sebi, SECC (Stock Exchanges & Clearing Corporations) regulations or does it require amendment to SCRA (Securities Contracts Regulation Act) regulations, where the word securities and derivatives are defined," former Sebi chairman U K Sinha had said earlier.

[The Economic Times]