Skip to main content

Sebi asks exchanges to list commodities for curbs in futures trading

The Securities and Exchange Board of India (Sebi) has set Rs.500 crore in one of the past three years as the minimum turnover for a commodity to remain eligible for futures trading on exchanges. This will come into effect from April 1.
“For any commodity to continue to be eligible for futures trading on exchanges, it should have an annual turnover of more than Rs.500 crore across all national commodity derivatives exchanges in at least one of the last three financial years,” Sebi said in a circular on Friday.
A commodity that generates less than Rs.2 crore a day in trading volume across all contracts and exchanges will thus be delisted. This is aimed at parking of funds in illiquid contracts to evade taxes.
Sebi has provided three years of gestation for commodities from their launch or re-launch dates.
“Exchanges earn Rs.250 per day for a commodity generating Rs.1 crore of turnover. While the norms are good, the limit should have been much higher for any exchange to launch commercially viable contracts,” said Kishore Narne, associate director, Motilal Oswal Financial Services.

Sebi has also asked exchanges not to consider relaunch of a commodity for at least one year after it becomes ineligible for derivatives trading. Discontinued commodities shall not be reconsidered by exchanges for re-launch of derivatives contracts for at least one year.

Sebi has asked commodity exchanges for a report within three months about the market size, standardisation, storage life, global connectivity, importance of value chain and geographical coverage of the commodities currently active. Exchanges are required to submit documents supporting their claims for any commodity to remain significant for futures trading.

According to the circular, commodities that require price control measures will be less conducive for the derivatives market.

Also, commodities with restrictions imposed by the Essential Commodities Act, Agricultural Produce Markets Committee Act and the Food Control Regulation Act are less conducive for futures trading.

Politically sensitive commodities like sugar and wheat could thus be delisted from derivatives trading in the near future. Also, weather sensitive or seasonal commodities will continue to be traded on the futures platform.
Business Standard New Delhi,21st January 2017

Comments

Popular posts from this blog

Budget: Startup sector gets new Fund of Funds, FM to allocate Rs 10K cr

  The Indian startup sector received a boost with Finance Minister Nirmala Sitharaman announcing the establishment of a new fund of funds (FoF) in the Budget 2025. The minister unveiled a fresh FoF with an expanded scope, allocating Rs 10,000 crore. The initial fund of funds announced by the government with an investment of Rs 10,000 crore successfully catalysed commitments worth Rs 91,000 crore, the minister said.   “The renewal of the Rs 10,000 crore commitment to the Fund of Funds for alternative investment funds (AIFs) is a significant step forward for the Indian startup and investment ecosystem. The initial Rs 10,000 crore commitment catalysed Rs 91,000 crore in investments, and I fully expect this fresh infusion to attract an additional Rs 1 lakh to Rs 1.5 lakh crore in capital,” said Anirudh Damani, managing partner, Artha Venture Funds.   Damani further added that this initiative will provide much-needed growth capital to early-stage startups, further strengthenin...

After RBI rate cut, check latest home loan interest rates of top banks for loans above Rs 75 lakh

  The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points from 6.50% to 6.25% in its monetary policy review as announced on February 7, 2025. After the RBI repo rate cut, banks such as SBI, Canara Bank, PNB, and Union Bank among others have cut their repo linked lending rates. Most other banks are also expected to cut their lending rates in line with the RBI rate cut. After banks cut their lending rates, their home loan borrowers will have to pay less interest. Normally, when a lender cuts the lending rate, borrowers get two options: Either to go for a reduction in EMIs or reduce the tenure of the loan. The second option will help the borrowers clear their home loan outstanding faster. In case, the borrower goes for reduction in EMI then the lower lending rate of the lender would mean lower Equated Monthly Installment (EMI) for borrowers.   EMI is the amount you will pay on a specific date each month till the loan is repaid in full.A repo rate-linked home ...

GST collections rise 9.9% to exceed Rs 1.96 trillion in March 2025

  Gross GST collection in March grew 9.9 per cent to over Rs 1.96 lakh crore, government data showed on Tuesday. GST revenue from domestic transactions rose 8.8 per cent to Rs 1.49 lakh crore, while revenue from imported goods was higher 13.56 per cent to Rs 46,919 crore. Total refunds during March rose 41 per cent to Rs 19,615 crore. After adjusting refunds, net GST revenue stood at over Rs 1.76 lakh crore in March 2025, a 7.3 per cent growth over the year-ago period.       - Business Standard 02 th March, 2025