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Commodities Briefing - Category | Regulatory more

Indian Gold Import Ban: Fact or Fiction?

Posted on 25 November 2016 by VRS  |  Email |Print

Prime Minister Narendra Modi’s move to ban 500 and 1,000 rupee notes caught the country by surprise, with many Indians now looking to liquidate their stockpiles of cash. Internet chatter is now a flurry, with some wondering whether the government’s next step will be to ban gold imports and prevent Indians from cashing in “black” money.
“The Indian financial market is in chaos right now – India, like the U.S. and Germany have a lot of people who produce newsletters on the internet that are not necessarily based on fact but rather contain extreme theories and rumors.” Jeff Christian, Managing Director, CPM Group…………………………………Full Article: Source

India considering permitting FIIs in commodities

Posted on 11 November 2016 by VRS  |  Email |Print

Allowing foreign institutional investors (FIIs) in commodity trading is under consideration, but no decision has been taken, the finance ministry on Thursday said.
“Many suggestions have come with regard to permitting FIIs into commodity trading, but no decision has been taken. The matter is under consideration. The matter is also under consideration of Sebi,” Economic Affairs Secretary Shaktikanta Das said. “If the Sebi board after taking a view makes recommendation as a regulator, if they permit… if it requires government permission, we will see. But so far, no decision has been taken,” he said…………………………………..Full Article: Source

Chinese policy opens window of opportunity for miners

Posted on 02 November 2016 by VRS  |  Email |Print

Renewed liquidity in early 2017 will support demand for next 12 months. Base metal and bulk commodities are in the midst of a mini-renaissance. While supply always gets focus, it is the demand side of the equation that has been more influential in pushing prices higher this year.
And, as with most things in commodities, the incremental shift has come from China. There is always a tendency to focus on supply in commodity markets, as this is the area of greatest visibility. However, this has done more or less as we expected at the start of the year; falling across many markets because of a lack of growth projects……………………………………Full Article: Source

Sebi axe likely to fall on illiquid commodities

Posted on 12 October 2016 by VRS  |  Email |Print

In its continuing efforts to improve risk management at the exchanges’ end, market regulator Securities and Exchange Board of India (Sebi) is considering suspending trading in commodities or contracts that are illiquid. During its first year of regulating commodity derivatives after the merger of the Forward Markets Commission (FMC) with it, Sebi has focused on improving risk management of commodity exchanges with the powers it has.
And, wherever it has been possible and practical to do so, it has aligned them with the equity derivatives. In the second year, while focusing on introducing much-awaited new products and allowing new participants in the commodity derivatives, focus on strengthening risk management will continue……………………………………….Full Article: Source

The right fix for commodity exchanges

Posted on 04 October 2016 by VRS  |  Email |Print

The Securities and Exchange Board of India has taken up the task of sprucing up commodity trading with great zeal ever since it took charge of exchange-based commodity trading last September. The task before the regulator is, however, far from easy.
Commodity exchanges have so far existed as a closed club with relatively lax regulations that provided room for price manipulations and other unfair practices. Investors and traders have been giving these exchanges a wide berth due to thin volumes and erratic price movements on the counters……………………………………….Full Article: Source

India: Commodities trading may open to foreigners

Posted on 03 October 2016 by VRS  |  Email |Print

The Securities and Exchange Board of India (SEBI) has initiated talks with the Reserve Bank of India (RBI) to allow foreign portfolio investors into the commodity derivatives market.
“We are already in talks with the RBI on this matter,” SEBI Chairman U.K. Sinha said on the sidelines of an event on the completion of one year of merger of Forward Markets Commission (FMC) with SEBI. “The FPI regulations emanated from FEMA (Foreign Exchange Management Act) and any kind of foreign money coming into the country has to have RBI approval.”…………………………………….Full Article: Source

Sebi allows options trading in commodities

Posted on 29 September 2016 by VRS  |  Email |Print

Sebi’s move aims to enhance liquidity and broad base participation in the commodity market. Capital markets regulator Securities and Exchange Board of India (Sebi) on Wednesday allowed commodity derivative exchanges to launch options contracts for trading with the aim of increasing liquidity and attracting more investors to the commodities market.
Sebi said commodity options will facilitate hedging by market participants and help deepen the commodity derivatives market. The exchanges have been allowed to trade in options following a recommendation by the Commodity Derivatives Advisory Committee (CDAC), Sebi said in a circular……………………………………Full Article: Source

Sebi reviews portfolio managers norms for commodity markets

Posted on 28 September 2016 by VRS  |  Email |Print

Markets regultaor Sebi today said it is reviewing norms to allow portfolio managers in the commodity markets. The Securities and Exchange Board of India (Sebi) further said that currently Portfolio Manager Services (PMS) would not be permissible in the commodity markets.
“Sebi is currently reviewing norms with regards to participation in commodity derivatives market,” the regulator said in a circular adding “PMS currently would not be permissible in the commodity derivative market.” The regulator has directed all commodity exchanges to treat a defaulter at any one of them as a defaulter on all the bourses……………………………………Full Article: Source

India: Sebi issues disclosure norm for commodity exchanges

Posted on 27 September 2016 by VRS  |  Email |Print

Markets regulator Sebi today asked commodity exchanges to make quarterly disclosure about disablement of member terminals, along with duration of such activity, due to shortage of funds and margins.
Sebi had started regulating commodity markets after the merger of Forward Markets Commission (FMC) with the markets regulator in September last year. This circular is being issued to consolidate and update such norms prescribed for commodity bourses by erstwhile FMC. …………………………………….Full Article: Source

Commodity Traders Face Tougher Rules as EU Curbs Speculation

Posted on 22 September 2016 by VRS  |  Email |Print

Traders in commodities from sugar to oil may face tougher regulation in the European Union as policy makers wrangle over new rules intended to curb speculation. European Parliament lawmakers warn that the EU’s latest proposals for preventing market abuse and spikes in food prices aren’t strict enough.
They delivered that message to Valdis Dombrovskis, the bloc’s financial-services chief, in a closed-door meeting earlier this month. Dombrovskis said he would “reflect on the points raised” and come out with a fresh proposal “soon.”……………………………………Full Article: Source

Global banking watchdog warns over Chinese banks

Posted on 20 September 2016 by VRS  |  Email |Print

Risks of a Chinese banking crisis are mounting, according to a warning indicator from the banking industry’s global watchdog. A key gauge of stress in the banking sector is now more than three times above the danger level, the Bank for International Settlements (BIS) said in its latest quarterly review.
China’s credit-to-GDP gap hit 30.1 in the first quarter of 2016, it said. The BIS considers a credit-to-GDP gap of 10 to be a sign of potential danger. A year ago the BIS quarterly review put the figure for China at 25.4………………………………………..Full Article: Source

India: All you wanted to know about Essential Commodities Act

Posted on 20 September 2016 by VRS  |  Email |Print

Last week, the Union food minister talked about considering imposing limits on retail prices of certain essential commodities. While India is a market economy where prices are ostensibly decided by demand and supply, certain laws empower the Centre to intervene in the market to protect consumer interests. The Essential Commodities Act (ECA) is one such key law.
The ECA was enacted way back in 1955. It has since been used by the Government to regulate the production, supply and distribution of a whole host of commodities it declares ‘essential’in order to make them available to consumers at fair prices………………………………………..Full Article: Source

RBI sets up working group on hedging of commodity price risk

Posted on 15 September 2016 by VRS  |  Email |Print

Reserve Bank has set up a working group to review the guidelines for hedging of commodity price risk by residents in the overseas market amid rising volumes of cross-border trade. The working group, RBI today said, will review guidelines for hedging of commodity price risk by residents in overseas markets during the development phase of our domestic commodity derivative market.
The eight member group headed by RBI Executive Director Chandan Sinha will assess the risks faced by resident entities and their hedging requirements and also identify gaps in the existing regulatory framework in relation to the hedging requirements of commodities, participants and products………………………………………..Full Article: Source

Fed asks Congress to limit bank commodity activities

Posted on 09 September 2016 by VRS  |  Email |Print

Two U.S. financial regulators on Thursday made a significant push to impose new limits on banks’ commodity-market activities, which have been under scrutiny for years. The Federal Reserve asked Congress to repeal banks’ authority to make a range of investments in nonfinancial businesses, saying the businesses put the firms’ safety and soundness at risk.
Separately, the Office of the Comptroller of the Currency, which regulates federally chartered national banks, proposed to prevent national banks from dealing or investing in metals such as copper. That reversed a previous regulatory policy that had allowed copper trading………………………………………..Full Article: Source

Fed: Get Goldman, Morgan Stanley out of commodities business

Posted on 09 September 2016 by VRS  |  Email |Print

The Federal Reserve recommended Thursday that Congress act to get megabanks Goldman Sachs and Morgan Stanley out of the business of managing physical commodities and more generally to eliminate the practice of “merchant banking” in which banks invest or outright own nonfinancial firms.
In a report mandated by the 2010 Dodd-Frank financial reform law, the agency officially called on Congress to repeal the wrinkle in the law that allows just two banks, Goldman Sachs and Morgan Stanley, to store, transport and extract commodities, saying that those practices raise “safety and soundness concerns as well as competitive issues.”……………………………………….Full Article: Source

The Gold Price Hinges on this Federal Reserve Decision

Posted on 05 September 2016 by VRS  |  Email |Print

Up one day. Down the next. Financial markets have been crazy this year. The volatility has been difficult to swallow. The uncertainty has benefited none other than, gold. The yellow metal is up about 26.3% from its December 2015 low.
Most gold stocks have outperformed the spot price. That’s because they were trading, on average, 95% below their 2011 highs. The average gold stock is up 110% this year. The best gold stocks have gone up three to five times already…or more. The question is, with gold having now pulled back 3.78% from the July high, what’s next?……………………………………….Full Article: Source

Keeping up with high-frequency traders

Posted on 05 September 2016 by VRS  |  Email |Print

Market regulators charged with overseeing orderly trading are fighting a losing battle when it comes to keeping up with super fast technology. Modern trading can take place in barely comprehendible measurements of time. Banks and high-frequency traders often boast of executing orders on stocks and futures exchanges in milliseconds, or thousandths of a second.
The bar is constantly being raised and already some trade in microseconds (millionths of a second) and even nanoseconds — billionths of a second. To put this into perspective, the average time it takes a human finger to click a mouse is a leisurely 150,000 microseconds………………………………………..Full Article: Source

Sebi tightens risk management for commodity derivatives

Posted on 02 September 2016 by VRS  |  Email |Print

The Securities and Exchange Board of India (Sebi) announced a series of measures for strengthening and upgrading of risk management in commodity derivatives markets. Some new concepts were also introduced to deal with liquidity problems in stressed situations.
For instance, up to two days of risk coverage by initial margin, concentration margin, tools to regain matched book and ‘default waterfall’. An exchange’s accountability in a default has also been increased, to match those at equity exchanges. So far, exchanges were not a counter-party to trades but ensured and responsibilities were met out of margins………………………………………..Full Article: Source

India questions London gold benchmark

Posted on 11 August 2016 by VRS  |  Email |Print

India has said it is setting its own gold standard, being among the largest consumers of gold historically. The Indian Bullion & Jewellers’ Association declares opening and closing gold prices daily based on which sovereign gold bonds are priced. The London Bullion Market Association fixes gold’s opening and closing prices internationally.
Addressing a seminar in Mumbai, IBJA President Mohit Kamboj said the London Bullion Market Association quotes did not match prices in India. Ruth Crowell, chief executive officer of the London Bullion Market Association, reacted to this observation stating, “Whether it is the Indian gold standard or London gold standard is a matter of deliberation. The industry need to sit together to make it happen.”……………………………………….Full Article: Source

Good and Services Tax (GST): All you need to know about the most important tax reform in India in 25 years

Posted on 04 August 2016 by VRS  |  Email |Print

The long-awaited Good and Services Tax (GST) Bill was deliberated in Rajya Sabha (Upper House of the Parliament) on Wednesday. This Bill is the 122nd Constitutional Amendment and will have to be passed by both the houses of the Parliament with a two-third majority. Its is being hailed as the most important tax reform in the country since 1991. The government argues that the passage of GST would add up to 2 per cent to the economic growth.
GST is based on the same principles as the Value Added Tax (VAT). It is a consumption-based tax, which means instead of being imposed at the point of manufacture, it will be imposed at the point of consumption. Moreover, it does not differentiate between goods and services………………………………………..Full Article: Source

Exchanges Supercharge Rules to Fight Cheaters Based Outside U.S.

Posted on 04 August 2016 by VRS  |  Email |Print

Foreign day traders were breaking rules and dodging regulators when Chris Concannon left Nasdaq Inc. in 2009. When he returned to the exchange industry five years later, he was dismayed to find it was still happening.
Now Concannon, back in the industry as chief executive officer of Bats Global Markets Inc., is leading the charge against brokers that enable manipulators. Bats got regulators’ approval to move quickly against market participants whose clients engage in illegal practices like spoofing, barring them in weeks rather than the months or years it used to take………………………………………..Full Article: Source

Commodity derivatives: Sebi finalising stricter warehousing rules

Posted on 03 August 2016 by VRS  |  Email |Print

The Securities and Exchange Board of India (Sebi) is to finalise stricter regulations for warehouse service providers (WSPs) that are recognised by commodity exchanges (comexes), especially for storing goods meant for selling on the exchange platforms. This will be very significant for trading in agricultural commodities.
Sebi has asked its Commodity Derivatves Advisory Committee to give its views and a meeting this month will discuss the new regulations. Sebi will be assigning the responsibility of settlement of futures contracts to commodity derivatives exchanges………………………………………..Full Article: Source

Indian regulator Sebi mulls new products for commodities market

Posted on 22 June 2016 by VRS  |  Email |Print

With an aim to deepen commodity derivatives market, regulator Sebi is working on new products that can have good liquidity while weeding out some existing contracts with limited or no appeal among investors and only being used for purely-speculative activities.
However, any new product on agriculture commodities is unlikely for now amid concerns that any such move may be seen as worsening the prevailing price-rise situation because of commodities trading being largely seen as speculative in nature, a senior official said………………………………………..Full Article: Source

Indian regulator Sebi plans checklist to approve listing for commodities futures trade

Posted on 21 June 2016 by VRS  |  Email |Print

Capital markets regulator Sebi plans to have a 13-point checklist to approve the listing and delisting of commodities from futures trading, two persons aware of the development told ET. The rules were slated to be discussed by Sebi with the commodity derivatives advisory committee (CDAC) sub-group on new products and participants on Monday.
Sebi will seek the feedback of CDAC before finalising the checklist. “The structured note will consider the objective and subjective parameters of the checklist before finalising it,” said one of the persons. “The objective part will comprise issues of liquidity, production statistics, shelf life, etc. The subjective part will examine issues of political sensitivity of the commodity, whether it’s widely dispersed, internationally traded, susceptibility to cartelisation, etc,” he added………………………………………..Full Article: Source

U.S. derivatives regulator rethinks algorithmic trading proposal

Posted on 17 June 2016 by VRS  |  Email |Print

The U.S. derivatives regulator is rethinking parts of its proposal to regulate automated trading and looking into whether the rule could affect too many people, it said on Thursday. The Commodity Futures Trading Commission, announcing it had reopened the public comment period on the rule through June 26, also said it is considering who should mitigate the risks of algorithmic trades and how the rule would apply when traders purchase their algorithms and systems.
It said it asked how to define “source code” and what software and hardware should be included within the term “Algorithmic Trading system.”……………………………………….Full Article: Source

EFSA finalises amendments to commodity exchange draft law

Posted on 31 May 2016 by VRS  |  Email |Print

The Egyptian Financial Supervisory Authority (EFSA) finalised the amendments to the draft law 95 of 1992 to establish a commodity exchange in the Capital Market, and intends to discuss them with the parties of the capital market in the coming days, chairperson of the authority Sherif Samy told Daily News Egypt.
He explained that the new regulations of the law are designed to regulate the relationship between the parties that deal with trading goods contracts, which include the exchange market itself, the suppliers of goods, brokerage firms, and traders of these contracts………………………………………..Full Article: Source

New global precious metals code created - LBMA

Posted on 27 May 2016 by VRS  |  Email |Print

A new code for precious metals has been created that will apply to all precious metals markets participants and will provide guidance for best practice, the London Bullion Market Association (LBMA) said. The new code will replace the Bullion Market annex currently within the Non-Investment Products (NIPs) code, it said in a release on Thursday.
The final global Foreign Exchange Code will be published in May 2017 and it will replace the FX element of the NIPS code, which focuses on best practice in the global wholesale foreign exchange markets, it added. The new FX Code is being jointly produced by central banks and market participants………………………………………..Full Article: Source

China looking at opening up commodities futures markets -regulator

Posted on 26 May 2016 by VRS  |  Email |Print

China may open up its commodities futures markets to overseas and financial investors, the country’s securities regulator said, as the world’s top consumer of many raw materials seeks to play a larger role in setting global commodities prices.
China’s commodities exchanges will also maintain a close eye on movements in the futures market, China Securities Regulatory Commission (CSRC) vice-chairman Fang Xinghai told a conference. A surge in prices of China commodities futures this year followed by a rapid slide have sparked fears of a boom-and-bust cycle………………………………………..Full Article: Source

India: Merger of FMC with Sebi restored confidence on regulatory oversight of commodities

Posted on 26 May 2016 by VRS  |  Email |Print

The merger of erstwhile commodities regulator Forward Markets Commission (FMC) with the Securities and Exchange Board of India ( Sebi) was a landmark change in the regulatory sphere over the past two years, which also marked a beginning in the direction of forming a unified financial regulator.
Regulators in India’s capital markets have been the direct outcome of scams, which were the result of loopholes and the lack of an authority to enforce rules………………………………………..Full Article: Source

Why the Fed might not be able to put a stop to gold’s run

Posted on 25 May 2016 by VRS  |  Email |Print

Gold has enjoyed a great start to 2016, but now finds itself in retreat, with the yellow metal hitting the lowest level since April in intraday trading Monday. But while the greater perceived potential for a Federal Reserve rate hike this summer appears to be sending the commodity lower, some say such speculation is not a good reason to sell gold.
“If you look at gold on a very long-term basis, there is literally very little correlation between interest rates and gold,” Boris Schlossberg said Monday on CNBC’s “Power Lunch.” “Basically, gold rose when interest rates rose in the ’70s, gold rose when interest rates declined in the ’90s,” so the likely effect of Fed rate rises isn’t straightforward………………………………………..Full Article: Source

EU ministers approve final commodity price benchmark rules

Posted on 18 May 2016 by VRS  |  Email |Print

EU ministers Tuesday approved the final text of EU rules that will govern all benchmarks used to price financial instruments, including commodity price benchmarks, on behalf of the EU Council. The rules will apply to commodity price benchmarks produced by price reporting agencies such as S&P Global Platts.
This was the last formal approval needed, after the European Parliament approved on April 28 a text already agreed informally with the council and the European Commission. The next step is for the text to be translated into all the EU’s official languages and published in the EU’s Official Journal, becoming binding a day later………………………………………..Full Article: Source

China Is Laying The Foundation For The Next World Gold Standard System

Posted on 06 May 2016 by VRS  |  Email |Print

On April 19, the Shanghai Gold Fix officially began. The pricing mechanism is intended to be a replacement for the London Gold Fix, the primary price-discovery mechanism for gold bullion today. The London “bullion” market is not a market in bullion.
Rather, it is a market in “unallocated” gold, defined as an unsecured liability of banks. In short, it looks suspiciously like an exercise in paper-hanging. The London Bullion Market Association claimed 21.95 million ounces of “net” clearing per day on average in 2013, worth about $27 billion. Estimates of “gross” trading are considerably higher than this………………………………………..Full Article: Source

Shariah Gold Standard – $2 Trillion In Assets “Could Send Price Soaring”

Posted on 06 May 2016 by VRS  |  Email |Print

The coming ‘shariah gold standard’ or shariah compliant gold could lead to a very significant source of new demand for physical gold coins and bars in the Islamic world. It is believed that this will contribute to much higher prices and gold “soaring” as some of the $2 trillion of assets held in Islamic financial institutions are allocated to the very small physical global gold market.
Fifty gram gold bars sit across a one kilo gold bar at bullion dealers Goldcore, in London, U.K., on Thursday, March 11, 2010. Gold priced in euros reached a new record on March 5, 2010 as investors, concerned that a Greek debt default may devalue the currency, purchased gold for diversification purposes………………………………………..Full Article: Source

China curbs commodity futures speculation

Posted on 05 May 2016 by VRS  |  Email |Print

Chinese regulators appear to have successfully popped a mini-bubble for now in steel and other commodity futures, scaring off speculators who piled in last month to drive steep gains in the prices of raw materials from coal to cotton.
China has vowed that it won’t allow its commodity futures markets to become a “hot-bed” for speculators, fearing that price movements not based on fundamentals could skew investment decisions and hamper efforts to rein in overcapacity………………………………………..Full Article: Source

Indian regulator Sebi may allow options in select commodities

Posted on 04 May 2016 by VRS  |  Email |Print

The Securities and Exchange Board of India (Sebi) is in talks with leading commodity exchanges about allowing options trading in select commodities. According to sources, the Multi Commodity Exchange might be allowed to introduce options in two metals, while the National Commodity & Derivatives Exchange (NCDEX) could be permitted options in two commodities from the oil complex.
“There is a vital need in the interest of the Indian economy to deepen the commodity derivatives market to attain the basis objectives of price discovery and provision of a platform for risk mitigation. The structural characteristics of options make them significantly attractive as a tool for price risk management.”……………………………………….Full Article: Source

China’s commodity trading curbs are working, at least for now: Russell

Posted on 03 May 2016 by VRS  |  Email |Print

It’s sometimes tempting to take a Western view of China and conclude that Beijing’s attempts to limit speculation in commodity futures in order to prevent price bubbles are ill-advised and ultimately doomed to failure.
It’s likely that market participants schooled in the Western ethos of light-touch regulation will baulk at China’s latest attempt to force the market, in this case for commodities, to behave in the fashion deemed appropriate by the authorities………………………………………..Full Article: Source

What if central banks have NOT lost control of gold?

Posted on 03 May 2016 by VRS  |  Email |Print

Has the positioning of the big commercial traders in the monetary metals futures markets lost its value as an indicator of future monetary metals prices? It seems like gold and silver bugs and maybe a few ordinary investors have been waiting for weeks for the usual smashing of the metals by those traders, the big investment banks, hoping to buy the next dip, only to have to watch the metals and the mining shares move steadily higher.
Among the market analysts whose prediction of a smash has gotten stale and who seems to be doubting himself is Clive Maund, whose latest commentary notes that it’s a “paradoxical situation.”……………………………………….Full Article: Source

China securities regulator orders major commodities exchanges to control futures speculation

Posted on 29 April 2016 by VRS  |  Email |Print

China’s securities regulator ordered the country’s major commodity futures exchanges this week to control speculative trading activity, sources told Reuters, after a surge in prices sparked fears of a boom-and-bust cycle.
In response, commodity futures exchanges in Dalian, Shanghai and Zhengzhou ordered major institutional investors that lack a commodities background to rein in their trading, three people with direct knowledge of the situation said. The sources didn’t define what was meant by a lack of background in commodities………………………………………..Full Article: Source

Indian regulator mulls single licence for equity, commodity brokers

Posted on 27 April 2016 by VRS  |  Email |Print

Markets regulator Sebi plans to introduce single license mechanism for equity and commodity brokers. The issue was discussed last week when Sebi chairman U K Sinha met domestic brokers. The proposed move is expected to reduce financial burden on brokers and would also help investors access equity and commodity markets through a single demat account, market participants said.
The proposal comes within a year since commodity market regulator Forward Markets Commission (FMC) was merged with the Securities and Exchange Board of India (Sebi)………………………………………..Full Article: Source

Senate committee approves authorization for U.S. commodities regulator

Posted on 15 April 2016 by VRS  |  Email |Print

The U.S. Senate Agriculture Committee on Thursday approved a reauthorization of the Commodity Futures Trading Commission, nearly three years after the legislative authority for the country’s commodities and swaps regulator expired. The head of the CFTC, Timothy Massad, praised the committee for clearing the way for the full Senate to vote on authorization.
“I am committed to continuing to work with Congress throughout this process, particularly on making sure end-users like agricultural producers can continue to safely and affordably use the derivatives markets, while ensuring these markets do not generate excessive risk to our financial system,” he said in a statement………………………………………..Full Article: Source

Indian regulator seeks to ramp up hedging in commodities

Posted on 14 April 2016 by VRS  |  Email |Print

The Securities and Exchange Board of India (Sebi) has asked the commodity market advisory committee headed by Ramesh Chand, agriculture expert and full-time member of Niti Aayog, to recommend measures to increase hedgers’ participation in commodity derivatives.
Hedging is the core function of the commodity derivatives market and trading and speculation are permitted with regulations only to provide liquidity. When the Forward Markets Commission was regulating commodity derivatives, it allowed margin relaxations for hedging. Sebi, with more powers and resources at its disposal, has asked the committee to take a holistic view on rules to make hedging easy………………………………………..Full Article: Source

Indian Regulator mulls single licence for equity, commodity brokers

Posted on 12 April 2016 by VRS  |  Email |Print

The Securities and Exchange Board of India (Sebi) is working on a plan to allow a single licence for equity and commodity brokers, a move that will help the broking community reduce costs. Though both security and commodity market intermediaries are now regulated by Sebi, following the absorption of Forward Markets Commission (FMC) into it, they still adhere to different guidelines and requirements.
Sebi has initiated an exercise to have a common set of these. “Once the commodity market stabilises, we will allow each lot of brokers to operate in the other segment. It will be done in a gradual and phased manner, so the market isn’t disrupted in any way,” a senior Sebi official said………………………………………..Full Article: Source

Central bank action may rejuvenate gold in Europe

Posted on 31 March 2016 by VRS  |  Email |Print

Gold prices remain low in historical terms, despite a rally at the start of this year, but demand may yet appear from an unexpected source. Some precious metal experts see interest returning to Europe, in part because the push towards negative interest rates has made depositing cash with banks less and less rewarding.
“Although gold is very much driven by U.S. Federal Reserve (Fed) policy, the impact of European Central Bank (ECB) policy decisions may become increasingly relevant for gold price action, as concerns about negative interest rates gain traction among investors,” UBS strategist, Joni Teves, said in a report this month………………………………………..Full Article: Source

India: Sebi tightens noose on commodity exchanges

Posted on 30 March 2016 by VRS  |  Email |Print

Tightening the noose on commodity trade, the Securities and Exchange Board of India (Sebi) has directed commodity exchanges to comply with the provisions of client code modifications in equity markets within one month.
Superseding the circulars issued by the erstwhile Forward Markets Commission (FMC), Sebi directed national and regional commodity exchanges to use the facility of client code modification only in exceptional cases. “The objective of this provision is to streamline client code modifications across entire spectrum of trading including equity and commodity markets alike,” Sebi stated………………………………………..Full Article: Source

EU wants stricter position limits for food commodities

Posted on 21 March 2016 by VRS  |  Email |Print

Tougher market share limits on food commodities traded in the European Union from January 2018 are needed, the bloc’s executive body said in a letter this week. Position limits come under the umbrella of a new EU law called Markets in Financial Instruments Directive (MiFID II), with rules being fleshed out by the European Securities and Markets Authority (ESMA).
MiFID II is the biggest overhaul of EU securities rules in a decade, designed to apply lessons from the 2007-09 financial crisis when food prices hit record highs, with some policymakers blaming speculators and hedge funds………………………………………..Full Article: Source

Fed stance shifts gold target

Posted on 21 March 2016 by VRS  |  Email |Print

So far this year, gold has been the frontrunner in the rally by precious metals. It has also performed in line with our beginning-of-the-year forecasts. The first upside target for gold for the year at $1,155/ounce and the second at $1,200 have been hit, though more quickly than expected.
Gold has (year-to-date) delivered 19 per cent returns while silver is up 16 per cent. Oil prices, which were at $37/barrel when we wrote the 2016 outlook for gold, slipped to $26/barrel by February and are now at $40/barrel, up 8 per cent. The US dollar index has dropped 4 per cent to 94.8. So where is the metal headed?……………………………………….Full Article: Source

Sebi allows commodity derivatives trading in bourses at IFSC

Posted on 18 March 2016 by VRS  |  Email |Print

India’s markets regulator Sebi has allowed trading in commodity derivatives at stock exchanges operating in International Financial Services Centre (IFSC). The move comes after amendment was made under Securities Contracts Regulation Act to include commodity derivatives as securities.
The Securities and Exchange Board of India (Sebi) last year began regulating the commodity derivatives market as well. In a circular today, Sebi said “commodity derivatives shall be eligible as securities for trading and the stock exchanges operating in IFSC may permit dealing in commodity derivatives”. ……………………………………….Full Article: Source

Have Commodities Backed The Fed Into A Corner?

Posted on 15 March 2016 by VRS  |  Email |Print

We have recently witnessed some subtle changes in the prices of assets that most investors pay little attention to. Many people are not even aware of their significance in world markets. However, when trying to understand the path of the stock market and the relative strength of the global economy, raw material prices often provide amazing clues to those who watch and understand their role and importance.
When I first took a job in the commodities business, the attraction was the global nature of raw material trading. While friends and schoolmates went to law school or medical school, pursued professional endeavors or took jobs in other sectors of the financial markets, it was the commodities market that was a magnetic force for me………………………………………..Full Article: Source

India unveils new oil and gas policy to boost output

Posted on 11 March 2016 by VRS  |  Email |Print

India has announced a slew of measures to boost the country’s sluggish output of oil, gas and minerals, including a new hydrocarbon exploration and licensing policy based on revenue sharing rather than cost recovery.
“The decision will enhance domestic oil and gas production, bring substantial investment in the sector and generate sizable employment,” Narendra Modi’s government said in a statement after a cabinet meeting, writes Victor Mallet, the FT’s South Asia bureau chief………………………………………..Full Article: Source

Indian regulator Sebi upgrading surveillance for commodity exchanges

Posted on 04 March 2016 by VRS  |  Email |Print

The Securities and Exchange Board of India (Sebi) and the National Commodity & Derivatives Exchange (NCDEX) are taking measures to improve improve surveillance after issuing restraining orders against 16 entities for manipulating castor seed futures.
Now, the regulator will focus on tightening surveillance. It is also focusing on improving governance and risk management levels at commodity exchanges. NCDEX is also investigating whole episode forensically. The exchange has also beefed up surveillance to watch spot market developments……………………………………….Full Article: Source

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