Informist, Saturday, Nov. 9, 2024

--SEBI Varshney: Mindful of difference between commodity and capital markets
--CONTEXT: SEBI whole-time member Kamlesh Varshney at commodity convention

--Econ adviser Saksena: Working on integrating spot, futures commodity mkts
--CONTEXT: Senior economic adviser Shashank Saksena at commodity convention

NEW DELHI – The Securities and Exchange Board of India is mindful that the commodity market is different from the capital market, Kamlesh Chandra Varshney, whole-time member of the market regulator, said Saturday. He was speaking at the 10th convention of Commodity Participants Association of India.

"You are going to see in the next few months a lot of recommendations made by the Industry Standards Forum are being implemented by SEBI to ease the business process," Varshney said, adding that commodity market players had been stressing that their requirements are different from capital market brokers and investors.

Varshney pointed out that SEBI has high expectations on regulatory compliance, only to build and maintain trust in commodity markets. "But while having that high regulatory expectation, we also ensure that we take into consideration your views in implementing it," he said.

On streamlining regulations, Varshney said, "We are also working on how multiple penalties for the same violation can be combined into one penalty at one point." SEBI is also looking to combine inquiry and adjudication into one single process, he said.

Speaking at the same event, Senior Economic Adviser Shashank Saksena said the government is working on integrating the spot market with the commodity futures market, to develop transparency in commodity markets.

Futures trading has helped commodity markets to discover prices efficiently and standardise the quality of agricultural commodities that are traded in spot markets across India. But while India is a major consumer of many commodities including gold and crude oil, the country is not a price setter but tracks prices that are traded on exchanges based in New York or London. "We should deliberate how to make India a price setter from a price taker," said Ashok Kumar Agarwal, executive chairman of clearing house Globe Capital, who attended the event.

Though hedging is a major part of derivatives trading in commodities, there is a lot of scope for investment in commodities. "There have been not just opportunities around hedging, but also in investment and a very robust delivery mechanism is in place," Praveena Rai, managing director and chief executive officer of the Multi Commodity Exchange of India.

"In the next 2-3 days, we're going to be launching the 1 kg gold monthly options contract. We are looking forward to a lot of engagement and interactions there," Rai, who was also present at the event, said. Currently, MCX offers bi-monthly futures contracts on 1 kg gold and 30 kg silver.

On investing, Latika Kundu, managing director and chief executive officer of Metropolitan Stock Exchange of India, said, "We are excellent at saving, but poor at wealth creation." She said commodity market participants will have to put their minds together to build more platforms for wealth creation. End

Reported by Afra Abubacker

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.