COMMODITY FUTURES MARKET
Eyeing the huge potential, the Commodity Futures Market has to offer, ASSOCHAM organised its 16th 'Commodity Futures Market Summit' on July 19, 2018.
While inaugurating the event, Mr. P. K. Bindlish, CGM & HOD, Commodity Derivatives Market Regulation Department (CDMRD), SEBI informed that SEBI is organising more awareness programmes in commodity derivatives and risk management. SEBI has also started a system of commodity trainer's concept, wherein training sessions will be held and training will be provided in this sector. SEBI is taking number of steps in this direction and it will continue with its endeavour to develop commodity derivatives market.
An expert advisory committee is being constituted to advice on risk management system. All settlements and clearings will be handled by clearing corporation system.
He also said that guidelines for foreign entities on hedging activity is expected soon. Further, all India Consultation to finalise the guidelines for exchange of mutual funds, is already underway. Any exchange can provide any product by 1st of October onwards.
The objectives of commodity derivatives and other derivatives, i.e., hedging and price discovery, as well as in trade practices and mechanisms, and with a view to usher in the next wave to reforms in commodity derivatives market, the government of India merged the erstwhile FMCwith SEBIin order to bring convergence of the two markets.
There is increasing institutional participation in the commodity derivatives markets. Category III AIFs have already been allowed.
Awareness is being created amongst the farmers and FPOs with help of other institutions like NABARD.
While inaugurating the event, Mr c.r. Chaudhary, MoS for Consumer Affairs, Food and Public Distribution said, National Agriculture Markets (e-NAM) will benefit those interested in commodity futures trading and participants should adhere to set Minimum Support Price ( MSP) on crops. The commodity future trading can help double farmer's income by 2022.
Mr. Shashank Saksena, Advisor (CM), Department of Economic Affairs, Ministry of Finance said, regulators, policy makers and other stakeholders need to look at integrating the spot market with the derivatives market. On the derivatives markets, the SEBI has taken number of steps and government has also provided policy features to develop these.
However, creating market institution which can provide the post-trading infrastructure and post-delivery mechanism to facilitate the integration of spot and derivatives markets will be challenging.