SEBI considers allowing futures trading in Petrol, Diesel
PrintListen to this Article
The Securities and Exchange Board of India (Sebi) is also looking at re-allowing futures trade in tur and urad, which were banned in 2007 after a spike in prices of these commodities.
"Yes, all products that I mentioned over here (tur and urad weather indices), including petrol and diesel, are being looked into," Sebi General Manager (Commodity Segment) Chhavi Kapoor said at a webinar hosted by the PHD Chamber of Commerce and Industry (PHDCCI).
She added that many products are in the pipeline, and given the market conditions, these products will be looked into. "I cannot say whether these products will come or not."
Currently, futures trading is allowed in crude oil. Petrol and diesel are, among others, the two major refinery products derived from crude oil.
Earlier too, there was an industry demand to allow futures trade in these two petroleum products. Sebi had sent the proposal to the petroleum ministry.
On this issue, PHDCCI President D K Aggarwal said, "This is a sensitive issue. I do not know whether Sebi or the ministry will be comfortable."
He said prices of petrol and diesel in India are affected by local taxes, which comprise 70 per cent of the total cost. Suppose a retail price of diesel is Rs 72 per litre, the cost of taxes itself comes to about Rs 50.
"Since these two products affect most industries and the entire economy, I think allowing these products will help in hedging the prices. As a market participant, we would like to have these products," he added.
Earlier, responding to a query on making corporate hedging compulsory in commodities derivatives markets by banks, the Sebi official said such a proposal is under a discussion stage with the Reserve Bank of India (RBI).
"It is still under discussion with the RBI... It cannot be mandated by Sebi alone. Both the regulators have to come on board on this issue," she said.
Right now, Sebi has asked the corporates to disclose their hedging details in their annual reports. These disclosures form a basis for further talks with the RBI, she added.
On allowing derivative trading commodities such as skimmed milk powder (SMP), the Sebi official said it is ready to consider new products if industry submits a proposal after a thorough research and justifying its need.
The government list of 91 notified commodities on which exchanges can launch commodities for trading, cannot be "sacrosanct", she said adding that the exchanges should look at new products learning from the current COVID-19 crisis.
"Covid-19 has been a big jolt, but it is also an opportunity for all of us to learn what we can do in future so that a pandemic of this kind will not affect the market," she said and noted that there has been no disruption as such in the commodities market as people have been able to trade smoothly. #casansaar (Source - PTI, Business Standard)
Category : Shares & Stock | Comments : 0 | Hits : 628
NSE will introduce four indices from April 8 in both the cash and derivatives segments. These include Nifty Tata Group 25 per cent Cap, Nifty 500 Multicap India Manufacturing 50:30:20, Nifty 500 Multicap Infrastructure 50:30:20, and Nifty MidSmall Healthcare. Nifty Tata Group 25 per cent Cap Index consists of 10 companies and is based on free float market capitalisation method. The indices have a base date of April 01, 2005 and a base value of 1000. The Nifty500 Multicap India Manufactu...
Investment firm BlackRock Inc's equity holding has surpassed the five per cent level in renewable energy solution provider Suzlon Energy with the acquisition of about 24.73 lakh shares. "The aggregate holdings of BlackRock, Inc. (on behalf of discretionary management clients) in Suzlon Energy Limited has moved above 5 per cent," a regulatory filing has said. The filing showed that BlackRock has acquired 24,73,442 shares (0.02 per cent of total share capital) in Su...
The National Stock Exchange (NSE) is looking to increase trading hours in the equity derivatives segment in a phased manner, a move that will potentially curtail the overnight risk arising from global information flow, a senior official said on Monday. The bourse is planning a session from 6 pm to 9 pm after a break from the closure of the regular session from 9.15 am to 3.30 pm, Sriram Krishnan, Chief Business Development Officer of NSE, told PTI. Further, transactions in the evening sess...
The Central Bureau of Investigation (CBI) on February 25 arrested Anand Subramanian, a former top official of the National Stock Exchange (NSE), in connection with alleged favour dolled out to certain traders. The development comes as authorities pressed ahead with an investigation into whether high-frequency traders were given unfair access to network servers at the exchange. News reports suggest that Subramanian, the former group operating officer and advisor to former managing direc...
Top stock exchanges on Monday said they will introduce the T+1 settlement cycle for trading equity shares and other instruments in a phased manner, starting 25 February. A joint statement issued by the National Stock Exchange of India Ltd and BSE Ltd confirmed a 3 November Mint report that said the Securities and Exchange Board of India (Sebi) has agreed to recalibrate its trade settlement circular and may implement T+1 in a phased manner. The change will make India one of the first co...
Comments