Business
Sebi may relax norms for select agri commodity F&O contracts
The regulator said exchanges may be allowed on a pilot basis, to launch or revive delivery-based agricultural contracts that initially operate as financially settled products and later shift to compulsory physical settlement once predefined thresholds such as average daily traded volume, open interest levels, or a two-year period are met. “Liquidity formation in several agricultural contracts remains constrained, especially at the launch or relaunch stage. Low volumes and limited open interest can reduce market confidence, creating a feedback loop that further suppresses participation,” Sebi said in a discussion paper.
“Although accredited warehouses and assaying mechanisms have expanded, their utilisation in certain commodities remains limited.”
Sebi suggested that on a pilot basis, a couple of commodities could be considered under the proposed framework such as maize, groundnut and chilli.
In a separate development, Sebi has also proposed doubling the client-level open position limits across all categories of agri commodities.
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