Capital and commodity market regulator SEBI plans to issue new regulations on risk management for commodity exchanges soon.

SK Mohanty, Executive Director, SEBI, said on the backdrop of discrepancies in castorseed contracts on the NCDEX, the regulator had formed a risk management committee to study the entire issue and suggest changes in norms.

The committee has submitted its report based on which new norms for exchanges will be announced very soon, he said, on the sidelines of Commodity Market Outlook for 2016 organised by the Indian Merchants Chamber on Thursday in Mumbai.

The new norms will involve reworking of margins and open position limits on all commodities.

The regulator is also considering to hike the contribution of commodity exchanges to the Settlement Guarantee Fund.

While stock exchanges set aside 25 per cent of their profit  to SGF, commodity exchanges transfer only 5 per to SGF.

SEBI is also evaluating special margins on narrow commodity contracts which often witness high volatility and run-up in prices. Of the several commodities traded on MCX and NCDEX, only 12-14 commodities are traded actively.

The regulator is also planning to announce new warehousing norms for exchanges recognised warehouse service providers to instil confidence among trading members who are insisting on taking delivery of commodities.

“We have already made exchanges responsible for ensuring quality of delivery made at the warehouses,” he said.

SEBI is already working on measures to bring parity on regulations between commodity and stock exchanges to bring both on the same platform, he said.

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