MCX registers first AIF, Harmony Hedge Fund, on its platform

Harmony Hedge Fund became the first category III Alternative Investment Fund to register on Multi Commodity Exchange, nearly a month after SEBI allowed such funds to invest in commodity derivatives.

Commodity exchanges have been waiting for 14 years to register institutional participants.

Taking forward a series of reforms initiated to facilitate investment in commodities, SEBI last month allowed Category III Alternative Investment Funds to participate in the commodity derivatives market.

While permitting AIFs in the commodity derivatives market, SEBI indicated that the commodity market currently lacks liquidity and depth for efficient price discovery and price-risk management due to lack of institutional participation.

Better price discovery It also stated that various committees, including those constituted by the Government, have recommended participation of institutional investors in commodity markets, to improve the quality of price discovery.

Mrugank Paranjape, Managing Director, MCX, said the entry of this institution would spur the interest and participation of other AIFs and their collective presence will lend significant vibrancy to the commodity derivatives market.

Madhavan, CEO, Harmony Hedge Fund, said that while diversifying portfolios, clients have long been looking for better risk-weighted and inflation-hedged returns and an exposure to commodities can provide this.

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