Scores of entities have come under the scanner of Sebi for alleged abnormalities in commodity derivatives trading activities amid stepped up surveillance measures, according to regulatory sources.
The Securities and Exchange Board of India (Sebi) has been working on ways to bolster the commodity derivatives segment which came under its ambit after the merger of Forward Markets Commission (FMC) in 2015.
In July, as many as 46 entities came under the scanner of Sebi for alleged abnormalities in trading activities in the commodity derivatives market, regulatory sources said quoting official documents.
While caution letters were issued to these entities, one case was taken up for further investigation. Besides, additional and special margins were reduced in the case of certain derivatives contracts in dhaniya and jeera in July, sources said.
Generally, observation or caution letters are issued to alert market participants about prima-facie unusual trading activities.
Sources said action was initiated in 525 instances with respect to the commodity derivatives market during the period from August 1, 2016 to July 31, 2017. These included imposition or withdrawal of additional and special margins as well as passing of interim orders, they added.
According to them, "soft action" such as issuance of caution letters was initiated in 485 instances during that period.
The surveillance measures are put in place on the basis of various parameters such as traded volume in the particular commodity and price movement.
To protect the interests of investors and integrity of the market, the regulator along with the exchanges have been implementing various surveillance-related measures.
Commodity exchanges have implemented measures like surveillance over warehousing service providers and restriction on self trades.
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