Sebi is also looking at mutual funds and PMS as a way for retail investors to get exposure to commodity derivatives while minimizing volatility risk. Photo: ReutersMumbai: The Securities and Exchange Board of India (Sebi) has proposed allowing mutual funds and portfolio management services (PMS) firms to invest in commodity derivatives. The proposal comes on the back of recommendations of the Commodity Derivatives Advisory Committee, which had proposed institutional participation to increase liquidity in commodity derivatives. On 26 April, the market regulator had allowed category-III alternative investment funds (AIFs), which include hedge funds, to invest in commodity derivatives. For PMS, Sebi has proposed that commodity derivatives should be used for leveraging and investments should be pooled to avoid concentration risk.

Source: Mint December 07, 2017 11:51 UTC