COMMODITY FU­TURES MAR­KET

Assocham Bulletin - - INDUSTRY -

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.

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