Having absorbed the activities of the erstwhile commodity market regulator Forwards Market Commission a year ago, SEBI will now allow brokers to integrate their equity and commodity broking arms into a single entity.
After his first board meeting as Chairman of Securities and Exchange Board of India, Ajay Tyagi, on Wednesday, announced a slew of reforms, including introduction of options trading in the commodity market and a unified licence regime for equity and commodity brokers.
E-wallet firms will not be allowed to offer any incentives such as cash backs to nudge investors to invest in mutual funds.
Market regulator SEBI on Wednesday chose to grant a unified licence to brokers and clearing members to operate in commodity derivative as well as equity markets.
Sebi also allowed investors to use e-wallets to buy mutual funds of up to Rs 50,000 per financial year. In this case, the limit would be up to Rs 50,000 or 90 per cent of folio value, whichever is lower. E-wallet's balance has been confined merely for MF scheme subscription.
Multi Commodity Exchange (MCX) and the National Commodity Exchange (NCDEX) are the two main nationwide commodity exchanges.
For options trading, Sebi is proposing to amend the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012.
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"World over, commodity options are very much used by hedgers, to protect themselves against volatility and this step will help Indian hedgers as well, apart from offering various strategies for hedgers, investors and traders alike", he added.
Speaking to reporters after a meeting here of the SEBI Board, Chairman Ajay Tyagi said commodity options trading is one among various measures being planned by the regulator to deepen the markets.
"MCX Managing Director and CEO Mrugank Paranjape said options definitely would complement the existing futures contracts and further bolsters price discovery process in Indian commodity market".
These are under deliberations but the larger issue is of having synergy with spot and derivatives markets is something which needs to be addressed before permitting institutional investors, the Sebi chief said.
"This step will reduce costs for financial intermediaries and give them more opportunities since it will be easier to approach equity (and commodity) clients", said Chintan Modi, executive V-P at securities house IIFL.
The board also approved mandatory appointment of monitoring agency where the issue size (IPOs/ FPOs/ Right issues) is more than Rs 100 crore.
SEBI's board approved a proposal for integration of stock brokers in equity and commodity derivative space. Under the present norms, such a monitoring agency is required to be appointed only by the companies raising more than Rs 500 crore through public offers.
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