Mumbai, June 30 (Commoditiescontrol) The Security and Exchange Board of India (SEBI) has allowed foreign portfolio investors to trade in exchange-traded commodity derivatives. The SEBI discontinued the existing eligible foreign entity route, which required actual exposure to Indian physical commodities, as per the official statement by the market regulator.
Any foreign investor desirous of participating in Indian exchange-traded commodity derivatives with or without actual exposure to Indian physical commodities can do so through the FPI route, SEBI said.
Foreign portfolio investors will be allowed to trade in all non-agricultural commodity derivatives and select non-agricultural benchmark indices. All trades will be in cash-settled contracts to begin with.
The participation of FPIs is subject to risk management measures to be brought in by exchanges. The position limits for foreign portfolio investors will be on a par with what is applicable for mutual fund schemes.
Foreign portfolio investors, including individuals, family offices and corporates, will be allowed exposure of 20% of the client-level position limit in a particular commodity derivatives contract, similar to currency derivatives.
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