SEBI Allowed Mutual Funds, FIIs to Invest Funds in the commodities market in India
SEBI Allowed Mutual Funds: SEBI (Securities and Exchange Board of India) opened a commodities market for foreign investors, fund houses and portfolio management services. Securities and Exchange Board of India (SEBI) was taken a fast step to allow FPIs (Finance Portfolio Investments) in a commodities market. Securities and Exchange Board of India (SEBI) wants to increase various investors to participate in the commodities market in India. Securities and Exchange Board of India (SEBI) allowed trading by foreign investors to the Indian commodity market with the aim to deepen the commodity market. FII may be allowed to surround their presentation with derivative trading in only those commodities where India has large production or consumption.
In December 2017 Securities and Exchange Board of India (SEBI) had issued consultation paper for the entrance of mutual fund and portfolio management services in the commodity market. However consultation paper aims to determine an ideal regulatory framework for such investment. For this, Securities and Exchange Board of India (SEBI) has two intentionsuities, d- firstly, to take depth in the market and secondly, to give choices to the investors that currently, they are only investing in eqebts, gold exchange trading funds etc but now they can also invest in a commodity market.
The finance minister initiated a necessary step to permit mutual funds and FIIs (foreign institutional investors) to participate in the commodity market. Portfolio management services and mutual funds should be allowed to trade in physical commodities
Mutual fund houses are also allowed to trade in commodities market by this year.
Last time when such a trading window was opened for HDFC bank shares, there was so much demand from Foreign institutional Investments for the stock that was breached within few hours. Now a trading for foreign institutional investors (FIIs) in HDFC bank is open on 1st June 2018. Huge Investors are expecting to participate for HDFC bank stock on June 1st when window open for FIIs buying. On July 1st, 2018 SEBI has decided to close FII trading window where only foreign investors can sell or buy their funds. Now that this will be the last opportunity for the FIIs to buy HDFC bank shares.
According to Securities and Exchange Board of India (SEBI), the entry of FPIs Finance portfolio investments has a huge effect on the commodity market to make Indian commodity market more efficient. It may also increase depth and liquidity in the commodity market.