Sebi examines position limits

Market regulator Sebi is examining position limits for non-agricultural contracts to improve liquidity and depth without weakening risk controls.

Phased approach for contracts

In some agricultural commodities, physical settlement from the outset can impede market development, and a phased approach could allow contracts to mature before physical settlement becomes mandatory.

Guidelines to follow

Sebi has completed consultations on the matter and guidelines will follow.

Reduce structural friction

The regulator is also working to reduce structural friction in commodity markets, including engaging with stakeholders on GST-related issues affecting participants who give or receive commodities through exchange platforms.

Technology for market needs

Technology should serve the specific needs of commodity markets, which include producers, commercial users, farmers, processors and physical hedgers.

Access without understanding

Access without understanding is not inclusion, he said, stressing the need for participants to understand both the utility and risks associated with commodity derivatives.

“Access without understanding is not inclusion”