Participation of SEBI registered Foreign Portfolio Investors (FPIs) in Exchange Traded Commodity Derivatives in India
Summary
SEBI repeals the previous Eligible Foreign Entities framework to discontinue their participation route in Exchange Traded Commodity Derivatives. The regulator permits SEBI-registered Foreign Portfolio Investors to participate in Indian ETCDs subject to specific conditions and risk management measures. Stock exchanges are instructed to amend their bye-laws and implement these provisions immediately.
Text
the existing EFE route be discontinued. Accordingly, the Circular No. SEBI/HO/CDMRD/DMP/CIR/P/2018/134 dated October 09, 2018 stands repealed.
allow foreign investors to participate in Indian ETCDs through the FPI route, subject to conditions prescribed by SEBI.
FPIs will be allowed to participate in cash settled non-agricultural commodity derivative contracts and indices comprising such non-agricultural commodities.
FPIs desirous of participating in ETCDs shall be subject to risk management measures applicable, from time to time.
FPIs other than individuals, family offices and corporates may participate in eligible commodity derivatives products as ‘Clients’ and shall be subject to all rules, regulations and instructions, position limit norms as may be applicable to clients...
FPIs belonging to categories viz. individuals, family offices and corporates will be allowed position limit of 20 per cent of the client level position limit in a particular commodity derivative contract.
The participation of FPIs including individuals, family offices and corporates shall be subject to compliance with the provisions of SEBI (Foreign Portfolio Investors) Regulations, 2019, SEBI (Custodian) Regulations, 1996 and other applicable SEBI circulars on ETCDs.
Stock Exchanges/Clearing Corporations may specify additional safeguards/conditions, as deemed fit, to manage risk and ensure orderly trading in ETCDs.
The provisions of this circular shall come into immediate effect.
Take steps to make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of this circular,
Bring the provisions of this circular to the notice of the members of the stock exchange and also disseminate the same on their website.
Communicate to SEBI, the status of implementation of the provisions of this circular.
Source: SecMarx — Participation of SEBI registered Foreign Portfolio Investors (FPIs) in Exchange Traded Commodity Derivatives in India. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.