 "Sebi reviews warehousing norms for agricultural products")
"Sebi is reviewing warehousing norms to strengthen warehousing facilities in the commodity futures market to ensure integrity of delivery mechanisms through scientific warehousing and to bring transparency in the warehousing field for the smooth functioning in the entire process," the regulator said in its annual report of 2015-16.
A consultation paper in this regard was placed for public comments in June this year. The Securities and Exchange Board of India (Sebi) had sought views of all stakeholders till June 17.
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The commodity derivatives exchanges currently use the polling methodology for determining spot prices. It is being reviewed with intent to improve the credibility and transparency of such process.
Warehousing infrastructure and its ancillary services play a critical role in the delivery mechanism of the commodity derivatives market.
A robust and credible warehousing infrastructure is essential for an effective commodity derivatives market that can instill confidence amongst the market participants and other stakeholders.
Under the proposed norms, warehouse service provider (WSP) will be a corporate body with the share capital of Rs 10 crore.
An accredited WSP will have a minimum net worth of Rs 50 crore for multi-commodities and a minimum net worth of Rs 25 crore for a single commodity.
The commodity exchange would have to ensure that the WSP, its promoters and key management personnel are 'fit and proper' to carry out business of warehousing, according to the proposal.