Commodity market boost: Sebi plans to boost institutional participation; derivatives and bonds in focus

Sebi is actively working to boost institutional investment in agricultural and non-agricultural commodity markets, aiming to strengthen their appeal for hedging purposes. The regulator is also exploring avenues to allow banks, insurance companies, pension funds, and foreign portfolio investors to participate in these markets, alongside efforts to deepen the corporate bond market. Markets regulator Sebi is taking steps to enhance institutional participation in both agricultural and non-agricultural commodity markets, aiming to make them more appealing for hedging activities, its chairman Tuhin Kanta Pandey said on Thursday, PTI reported. Speaking at the Bloomberg Forum for Investment Management, Pandey said, “We are looking to enhance institutional participation to make this market more attractive for hedging.” He added that deepening India’s cash equities market and improving the derivatives segment remain high priorities. The Sebi chief emphasised that any further measures to strengthen commodity markets would be consultative and carefully designed. Last month, he had indicated plans to engage with the government to allow banks, insurance companies, and pension funds to invest in non-agricultural commodity derivative markets. Pandey also highlighted that Sebi is examining proposals to permit foreign portfolio investors to trade in non-cash-settled, non-agricultural commodity derivative contracts. Beyond commodities, the regulator has taken steps to deepen the corporate bond market, making it more accessible for issuers and investors. Sebi is also considering bond derivatives and encouraging the growth of municipal bonds through regulatory reforms and targeted outreach programmes. End of Article