SEBI i.e. Securities and Exchange Board of India, which is the regulator of the financial markets of our country, has recently announced a plan for major changes in the commodity markets. SEBI Chairman Tuhin Kant Pandey said that they are working towards increasing the participation of institutional investors in both agricultural and non-agricultural commodity markets. Its objective is to make the commodity market more robust and attractive for investment, especially for hedging i.e. risk reducing activities.
He said in the Bloomberg Forum for Investment Management that SEBI is thinking of bringing necessary changes and policies so that institutional investors like banks, insurance companies and pension funds can become more active in this market. These steps will help in making the commodity market accessible to large financial institutions instead of limiting it to only small investors.
Emphasis will also be on cash equity and derivatives market
SEBI Chairman also said that high priority has been given to strengthening India’s cash equity market and reforming the derivatives section. Changes in the derivatives market will provide better options to investors and will also increase market stability. They also want to ensure that any new policy is implemented only after careful consideration and consultation so that balance is maintained in the market.
New opportunities for foreign investors
SEBI is also considering allowing foreign portfolio investors to trade in the non-cash-settled non-agricultural commodity derivatives market. This means that foreign investors will also be able to come into this sector, which will increase the depth of the market and the amount of investment will also be higher.
Focus on corporate bonds and municipal bonds
Apart from commodities, SEBI has also taken steps to make the corporate bond market more accessible and developed. Through this, it will be easier for bond issuing companies and investors to travel to this area. SEBI is also planning bond derivatives, which will provide more new options in the bond market.
SEBI is also bringing special programs and reforms to promote the growth of municipal bonds i.e. local government bonds. This will make it easier for states and municipalities to raise funds and investors will also get better options.