 "Sebi pitches for allowing FPIs in commodities derivative mkt")
Without giving any specific timeframe, Sinha said Sebi's first priority would be to develop trust in the commodities market, after which it would focus on its development by allowing participation by banks and foreign portfolio investors (FPIs), among others, over a period of time.
"Sebi will focus on how prices and benchmark rates are fixed in commodity markets and also look at the possibility of having products like options and futures," he said at an event to formalise the merger of commodities markets regulator FMC (Forward Markets Commission) with the Securities and Exchange Board of India (Sebi).
Also Read
Asked specifically about the timeframe for allowing FPIs, Sinha evaded a direct answer and said the same would be announced as and when it happens.
Department of Economic Affairs Secretary Shaktikanta Das, who was also present at the event, too evaded a direct answer on the timeframe and said Sebi is now the regulator for this market and all its recommendations would be considered by the government in due course.
Das said the government has to be alive to the overall price situation.
"As we go by, balance needs to be found between price stability and market development. We have to have a situation where prices do not become unusually volatile.
"There has to be policy certainty also. This is a challenging task and I am confident that Sebi will be able to strike a balance," he said.
Commodities market has been hoping for entry of FPIs after FMC's merger with Sebi, but RBI recently told the markets regulator to keep any such decision on hold till a policy review is done by the government in this regard.
The merger was formalised at the event with Finance Minister Arun Jaitley ringing the customary stock market bell.