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Commodities Briefing - Category | Regulatory more

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

India: Budget signals introduction of new commodity derivatives products

Posted on 01 March 2016 by VRS  |  Email |Print

While the FM did not specify products likely to be introduced, market participants expect the introduction of option contracts in commodity derivatives, similar to those available in equities. Finance minister Arun Jaitley on Monday indicated that the government plans to allow the launch of new commodity derivative products to help deepen the markets.
While the finance minister did not specify the products likely to be introduced, market participants expect the introduction of option contracts in the commodity derivatives market, similar to those available in the equities market. They also expect a wider range of indices to be introduced………………………………………..Full Article: Source

Lawmakers Urge Commodities Agency to Keep Plan to Limit Futures Contracts

Posted on 26 February 2016 by VRS  |  Email |Print

Lawmakers heaped criticism on an advisory committee report to the Commodity Futures Trading Commission recommending that the agency scrap its proposed rule on position limits in derivatives trading. The report and a dissenting opinion were presented at a meeting of the commission on Thursday.
The report, which was approved 8 to 1 by the Energy and Environmental Markets Advisory Committee, says that federally mandated position limits are not necessary and that the C.F.T.C. should not enact the rule it has been working on. It adds that if the agency goes ahead with the rule, it needs substantial changes………………………………………..Full Article: Source

World Gold Council: US dollar’s effect on gold overdone

Posted on 18 February 2016 by VRS  |  Email |Print

At first glance, 2015 wasn’t good for gold. By year-end, gold’s dollar price was down more than 11%. Investor sentiment was bearish: average net-longs reached their lowest level since 2003, and gold-backed exchange-traded funds (ETFs) saw outflows of 100 tonnes for the year.
Better economic performance in the U.S. allowed the Federal Reserve (Fed) to raise its funds rate on Dec. 16, 2015 for the first time in 9.5 years. In the months before, higher bond yields strengthened the dollar, putting pressure on gold………………………………………..Full Article: Source

Indian Regulator puts rider for commodity derivative reforms

Posted on 12 February 2016 by VRS  |  Email |Print

At an event here, P K Bindish, chief general manger at the regulatory body, the Securities and Exchange Board of India (Sebi), said: “We want the commodity futures market to bring risk management at par with the equity market before allowing new instruments and a new set of participants for hedging on commexes.”
This implies Sebi might not allow instruments like options and indices to trade on a commodity exchange till these mitigation facilities are in place. While the commexes claim to already have a strong risk management system already in place, the recent suspension of castor seed futures by the National Commodity & Derivatives Exchange (NCDEX) has restirred the issue………………………………………..Full Article: Source

Indian regulator Sebi sets up panel for commodity market

Posted on 26 January 2016 by VRS  |  Email |Print

The Securities and Exchange Board of India, now also the regulator for commodity derivatives, has set up an advisory committee for the commodity market. It will be chaired by Ramesh Chand, member, NITI Aayog. On it are Sameer Shah, managing director, National Commodity & Derivatives Exchange and P K Singhal, joint MD at Multi Commodity Exchange of India.
Two senior officials of Sebi are on it, as are Vijay Sardana, a commodity expert, Gopal Krishna Nayak from the Indian Institute of Management at Bengaluru, and one G Chandrashekhar, said a source. The role of the committee is to discuss issues relating to regulations and development of commodity markets and suggest required measures to the Sebi………………………………………..Full Article: Source

Indian Regulator Allows Defunct Commodity Exchanges to Exit From Bourse Business

Posted on 12 January 2016 by VRS  |  Email |Print

Markets regulator Sebi on Monday allowed defunct commodity exchanges to exit the business if no trading has taken place for more than a year. The Securities and Exchange Board of India (Sebi), in a circular, also said national commodity bourses will have to continuously meet the turnover criteria of Rs 1,000 crore per annum.
Regional commodity exchange will have to ensure that they have at least five per cent of the nation-wide market share of the commodity, which is principally traded on their platform………………………………………..Full Article: Source

Fed Move Adds to Pressure on Commodities

Posted on 18 December 2015 by VRS  |  Email |Print

As global financial markets from equities to bonds rallied on the back of the U.S. decision to raise interest rates, most commodities bucked the trend after the Federal Reserve compounded their long-term woes.
Rock-bottom rates had helped stoke the commodities boom as investors hunted for yield and companies tapped cheap money to vastly expand production. Now commodities markets are suffering, with the new rate-cycle adding to a multitude of industry-specific problems—a toxic combination of oversupply and tepid demand growth from a slowing Chinese economy………………………………………..Full Article: Source

Indian regulator Sebi to chalk out exit route for commodity exchanges

Posted on 18 December 2015 by VRS  |  Email |Print

The Securities and Exchange Board of India (Sebi) will soon spell out exit route for commodity exchanges. The move will pave the way for closure of defunct ones to apply for voluntary exits. At present, there are 12 commodities exchanges, of which six are nationalised,while the rest is regional.
If an exchange is not working for a year or has annual trading turnover on its platform of less than Rs 1,000 crore will be asked to wind-up,sources said. Some exchanges is learnt to have asked Sebi for voluntary exit. Former commodities market regulator Forward Markets Commission (FMC) had also suggested some names to the government as it did not have the power to derecognise any exchange………………………………………..Full Article: Source

Will slumping commodity prices derail the Fed’s rate-hike strategy?

Posted on 15 December 2015 by VRS  |  Email |Print

The commodities rout continues ahead of an historic Federal Reserve meeting this week. With the central bank widely expected to raise rates for the first time in 10 years, commodity prices are not co-operating, falling to multi-year lows.
Crude oil futures fell for a seventh straight session on Monday, their longest losing streak since mid-2014, on growing fears that the global oil glut would worsen in the months to come in a pricing wars between key producers. Natural gas prices also tumbled to 14-year lows………………………………………..Full Article: Source

Sebi puts in place software testing norms for commodities market

Posted on 14 December 2015 by VRS  |  Email |Print

To prevent possible manipulation, Sebi has made it compulsory for commodity brokers and traders to get their trading systems as well as software tools tested in consultation with the exchanges. Sebi’s guidelines related to testing of software and trading systems are already applicable for stock exchanges and would now be applicable for commodity bourses.
Commodity markets have come under the regulatory ambit of Sebi following the merger of Forward Markets Commission (FMC) with the capital market watchdog in September. Since new software or changes to the existing software without proper testing may affect the integrity of the markets, the regulator said the guidelines are being made applicable to commodity markets also, Sebi said in a circular………………………………………..Full Article: Source

China lifts imports of some key commodities

Posted on 09 December 2015 by VRS  |  Email |Print

Chinese imports of some key commodities including copper, iron-ore and coal rose month-over-month in November, but that failed to alleviate the negative price sentiment surrounding metals because of concerns about a broader slowdown in the world’s second-largest economy.
China’s steel exports slowed during the month, underscoring the global lack of buyers for a glut of supplies that has been weighing on prices of the metal as well as the main steel-making resource, iron ore. The country’s imports of copper rose month-over-month by 9.5 per cent to 460,000 tons, while iron-ore imports rose 8.75 per cent to 82.13 million tons during the same month………………………………………..Full Article: Source

Gold market bets on a slow Fed

Posted on 07 December 2015 by VRS  |  Email |Print

Gold prices hit a low of $1046.4/ounce on Thursday, but ended the week at $1,086/ounce with a gain of 2.7 per cent, thanks to the US jobs report. Data on Friday showed that the US non-farm payrolls increased by 211,000 in November. October’s increase was also revised upwards to 298,000 from 271,000. This set the mood for a rate hike.
But given the reaction in gold and the dollar market on Friday, it looks as though the market is pricing in a slow pace of rate hikes after the first one expected this month. On Friday, the US dollar index gained just 0.7 per cent but gold jumped up 2.3 per cent………………………………………..Full Article: Source

Fed rate hike to hit commodities-linked firms, economies

Posted on 03 December 2015 by VRS  |  Email |Print

Companies and countries whose fortunes are tied to commodities could see their borrowing costs climb as an interest rate increase by the U.S. Federal Reserve exacerbates the impact of lower raw material prices, top asset manager Schroders warned on Wednesday.
“Tighter dollar liquidity is going to put quite a lot of pressure on companies who survived the last year with commodities prices having fallen,” chief economist and strategist for Schroders, Keith Wade, told CNBC’s “Street Signs” on Wednesday. “As they look into next year, they are going to be asking themselves: are commodities prices going to recover, are our banks going to continue to fund this if dollar liquidity is tightening? … The answers to those questions might be a bit more difficult.”……………………………………….Full Article: Source

Gold price: Can resistance hold ahead of Fed meeting?

Posted on 02 December 2015 by VRS  |  Email |Print

Having dropped to an intraday $1,052 an ounce and settled at $1,054 on Friday – the lowest level since the $1,045 reached in February 2010 – gold rose in New York on Monday to $1,064 an ounce.
It added to gains overnight and at one point touched $1,074, though it has softened slightly in the hours since. Gold and other dollar-denominated commodities are currently being pulled hither and thither by the fluctuations in the US currency, which touched a near 13-year high before falling back. ……………………………………….Full Article: Source

Fed to blame for commodities rout, not China

Posted on 26 November 2015 by VRS  |  Email |Print

Blame China. A global glut of commodities has emerged because China suddenly decided it no longer wants mineral ores. Prices are now collapsing, which threatens the worldwide supply chain. It’s all China’s fault. I have one problem with this story. Look at the first chart on the quantity of China’s iron ore imports and you see scant sign that iron ore is no longer in demand. That demand curve has flattened out but this is after a 16-fold growth over the past 15 years. A breather was due at some point.
And what you see in iron ore you can also see in other major minerals and in petroleum. In some cases there has been no slowdown at all. Imports of copper ore and concentrates, for instance, are still growing at double digit rates………………………………………..Full Article: Source

Sebi may seek relief for commodity exchange warehouses

Posted on 26 November 2015 by VRS  |  Email |Print

There could soon be a glimmer of hope for hedgers and traders in farm futures such as pulses and oilseeds. Sebi is planning to write to the government to exempt exchange warehouses from stock limits under the Essential Commodities Act once prices of these commodities stabilise.
“We might request the government to exempt commodity exchange warehouses from stock limits to encourage more deliverybased trades in pulses and oilseeds and to curb the possibility of excessive speculation through the threat of delivery,” a senior Sebi official told ET………………………………………..Full Article: Source

Iran oil minister doubts OPEC will act on market

Posted on 24 November 2015 by VRS  |  Email |Print

Iran’s Oil Minister Bijan Zanganeh said on Monday he doubted there was sufficient will in all of OPEC for the group to act to support oil prices at its Dec.4 meeting. When asked for his reaction to a statement from Saudi Arabia reiterating its continued openess to work with producers outside OPEC, the minister said: “I don’t believe there is strong intention from some parts of OPEC to stabilise the market.”
“It’s OPEC’s mission to stabilise the market for the benefit of all its members,” he added. “If (that) is subject to cooperation with non-OPEC producers then it means we are going to do nothing.”……………………………………….Full Article: Source

What’s in store for gold after Fed rate hike

Posted on 23 November 2015 by VRS  |  Email |Print

Gold prices took a blow last week as the Fed minutes of the October meeting hinted at a rate hike by the central bank in December. The yellow metal saw prices drop to a five-year low of $1,065/ounce and ended finally at $1,076/ounce on Friday.
A Fed spokesperson said the bank is confident of seeing inflation returning to its target of 2 per cent soon. The US dollar index, which measures the strength of the greenback against six other major currencies, rallied closer to the 100 mark. It hit a high of 99.85 on Wednesday and closed the week at 99.565………………………………………..Full Article: Source

Commodities rout and unfriendly regulations further thin foreign interest in China’s mining sector

Posted on 09 November 2015 by VRS  |  Email |Print

Foreign investment in China’s mining sector has slumped to the lowest in more than a decade amid the downturn in the commodities industry, which dampened the already low levels of inbound investment over the years due to the sector’s unfriendly regulatory environment. A relative abundance of distressed quality assets overseas amid the global commodities market rout also means foreign firms are unlikely to make significant investment in China soon, industry observers say.
“With the prolonged downturn in commodities, assets are being forced on to the market at prices that are reflective of the urgency which sellers must act,” John Tivey, the global head of mining and metals at law firm White & Case, told the South China Morning Post………………………………………..Full Article: Source

Fed inflicts more damage on gold price

Posted on 05 November 2015 by VRS  |  Email |Print

On Wednesday on the Comex market in New York, gold futures with December delivery dates fell for a sixth session in a row giving to trade at a seven-week low. Exchanging hands for $1,107.00 an ounce in late afternoon trade, gold is down more than $75 an ounce or 6% from where it trading just before the Federal Reserve’s interest rate announcement last week. Gold fell to a near five-year low of $1,085 in early August.
Fed Chair Janet Yellen testified before the House Financial Services Committee on Wednesday and echoed the language of the FOMC minutes which opened the door for a rate rise when the bank next meets in December. Yellen gave a positive reading of the employment and housing markets in the US further boosting rate hawks………………………………………..Full Article: Source

CFTC Pulls Plug on Commodity-Flows Report

Posted on 05 November 2015 by VRS  |  Email |Print

U.S. futures market regulators are going to stop collecting data on the flow of money from index funds into commodity markets, retreating from a practice they began a decade ago when those funds were blamed for soaring prices.
In a speech Wednesday, Commodity Futures Trading Commission Chairman Timothy Massad said the agency would stop surveying banks and traders for its monthly Index Investment Data report, which tracks the amount of money following commodity indexes such as the S&P GSCI and the Bloomberg Commodity Index………………………………………..Full Article: Source

No need for commodities investors to worry too much over Fed rate increase, analysts say

Posted on 30 October 2015 by VRS  |  Email |Print

US interest rates have long been regarded as critical in determining the outlook for commodities, but some analysts say investors need not worry too much about the US Federal Reserve reversing its monetary stimulus efforts in the near term, because commodity prices could rally even as US interest rates return to more normal levels.
Julian Jessop, chief global economist for Capital Economics, said in a report on Wednesday that it was widely assumed an increase in US interest rates might lead to lower commodity prices, as higher rates could result in slower economic growth, reduced demand for commodities, and increase the opportunity cost for investors holding commodities………………………………………..Full Article: Source

India: Investors could soon get to trade in commodity, weather-based indices

Posted on 26 October 2015 by VRS  |  Email |Print

Traders, rich investors and hedgers could get to trade in commodity and weather-based indices, akin to Nifty and Bank Nifty in the equity segment, in a matter of months. In a move to deepen the decade-old commodity futures market, its new regulator Sebi is studying how this could change the trading landscape.
“We are studying the commodity market. Our initial sense is that it is a shallow market. We would like it to be deepened like the equity market, where introduction of demat accounts and online trading were the game changers. We are identifying what these (game changers) could be for the commodity markets,” a senior Sebi official said……………………………………….Full Article: Source

London Gold Market Under Scrutiny as Bullion World Gathers

Posted on 19 October 2015 by VRS  |  Email |Print

The gold industry won’t just be guessing where prices are heading at its annual gathering in Vienna this week. It will ponder how to change London’s spot market, the biggest in the world.
The London Bullion Market Association, which oversees trading and is holding its annual conference starting Monday, has invited proposals on how to improve the city’s over-the- counter market and suggested more detailed reporting of transactions. At the same time, the producer-funded World Gold Council has also agreed with five banks to talk about potentially starting standardized central clearing and listed derivatives………………………………………..Full Article: Source

India: Agri commodities: Sebi trains focus on curbing speculation

Posted on 12 October 2015 by VRS  |  Email |Print

In its expanded role as regulator of the commodities derivative market, Sebi is working on a robust mechanism to ensure fair price discovery of agri products and curb excessive speculative activities. The regulator has already sought help from the Ministry of Agriculture with regard to the physical market price data sources and for improving the methodology for determination of final settlement price.
Sebi’s focus is to ensure that derivatives trading is used as a hedging instrument by farmers and others in the commodities marketplace against seasonal and unforeseen price fluctuations rather than for creating speculative bubbles to make quick money, a senior official said. ……………………………………….Full Article: Source

Bank of England quizzing UK banks over commodities exposure

Posted on 09 October 2015 by VRS  |  Email |Print

The Bank of England has asked British banks to report their exposure to commodities and ensure they are mitigating risks effectively, a source familiar with the situation said on Thursday. Prices for oil and other commodities have fallen sharply in recent months, and earlier on Thursday the Financial Times reported the BoE move had been triggered by the sharp fall in the shares of commodities and mining company Glencore.
“This is something being done in the course of normal supervision,” the source said, adding that the request had been made by the Prudential Regulation Authority, the arm of the BoE in charge of day-to-day bank regulation………………………………………..Full Article: Source

Ringing in a new era for commodity market

Posted on 05 October 2015 by VRS  |  Email |Print

After 12 years of debate between the Centre and various parties, the Forward Markets Commission (FMC) has finally merged with the Securities and Exchange Board of India (SEBI). The Forward Contracts Regulation Act (FCRA) now stands repealed. Commodity derivatives will be governed by rules of the Securities Contract Regulation Act (SCRA) and commodity exchanges will now become deemed stock exchanges.
This paves the way for new products and opens the door for banks, mutual funds and other institutions to start commodity trading. What helped the case for a merger this time was the scam at NSEL and the public furore that followed………………………………………..Full Article: Source

New Sebi rules for commexes

Posted on 02 October 2015 by VRS  |  Email |Print

The Securities and Exchange Board of India (Sebi) has tightened margin and collateral requirements for commodities trading, to align these with practices in the securities market. Now the regulator for commodities’ derivatives, too, a circular it issued on Thursday prescribes limits for various assets put as collateral with an exchange. The new norms shall be implemented from January 1.
The limit for cash or its equivalents has been fixed at 50 per cent and for commodity-specific limits, too. The limit for agri commodities to be accepted as liquid asset collateral is 40 per cent………………………………………..Full Article: Source

India combines markets and commodities regulators

Posted on 29 September 2015 by VRS  |  Email |Print

India has merged its markets and commodities regulators, in a move that paves the way to opening up commodities markets to foreign investors and could also lead to the listing of the country’s main stock exchanges.
The decision to combine the regulators was prompted by the collapse of India’s largest commodities spot market two years ago, prompting a crisis of confidence in the Forwards Markets Commission, which regulates commodities derivatives trading. A government investigation in 2013 found irregularities at the National Spot Exchange Limited, which traded short-term contracts in agricultural goods such as sugar………………………………………..Full Article: Source

Commodity participants keep fingers crossed

Posted on 29 September 2015 by VRS  |  Email |Print

It was a packed gathering at the Trident, Nariman Point, at an event to mark the subsuming of the commodity markets regulator, the Forward Markets Commission, with its capital markets counterpart, the Securities and Exchange Board of India (Sebi).
Finance Minister Arun Jaitley, economic affairs secretary Shaktikanta Das and Sebi chairman U K Sinha all made exhortation to “not worry about development of commodity futures, including agricultural futures”. That was in response to the worry of players in the commodity markets………………………………………..Full Article: Source

India: FMC to merge with Sebi Today

Posted on 28 September 2015 by VRS  |  Email |Print

In the first ever merger of two regulators, over 60-year-old Forward Markets Commission (FMC) will merge on Monday with the younger but much bigger capital markets watchdog Securities and Exchange Board of India (Sebi) to create a unified regulatory body. Sebi was set up in 1988 as a non-statutory body for regulating the securities markets, while it became an autonomous body in 1992 with fully independent powers.
FMC, on the other hand, has been regulating commodities markets since 1953, but lack of powers has led to wild fluctuations and alleged irregularities remaining untamed in this market segment. The commodities market has been known to be more prone to speculative activities compared to the better-regulated stock market, while illegal activities like “dabba trading” have also been more frequent in this segment………………………………………..Full Article: Source

U.S. regulators revise proposal on commodity position limits

Posted on 23 September 2015 by VRS  |  Email |Print

U.S. derivatives regulators are revising their proposal to limit the positions that traders can hold in commodity markets to make it easier for some hedge funds and banks to keep large trades. The Commodity Futures Trading Commission wants to allow financial firms to count their market positions separately from subsidiaries if the parent company says it does not control trading at the affiliate, according to a proposal issued on Tuesday.
Under revised rules, a company would simply be able to file a notice with the CFTC saying that it has no control over trading at a subsidiary and that firewalls are in place to prevent access to information, CFTC Chairman Timothy Massad said………………………………………..Full Article: Source

Bitcoin Is Officially a Commodity, According to U.S. Regulator

Posted on 18 September 2015 by VRS  |  Email |Print

Virtual money is officially a commodity, just like crude oil or wheat. So says the Commodity Futures Trading Commission (CFTC), which on Thursday announced it had filed and settled charges against a Bitcoin exchange for facilitating the trading of option contracts on its platform.
“In this order, the CFTC for the first time finds that Bitcoin and other virtual currencies are properly defined as commodities,” according to the press release. While market participants have long discussed whether Bitcoin could be defined as a commodity, and the CFTC has long pondered whether the cryptocurrency falls under its jurisdiction, the implications of this move are potentially numerous…………………………………Full Article: Source

India- New gold policy could be a win-win proposition

Posted on 17 September 2015 by VRS  |  Email |Print

The best part of the Modi government’s new gold policy is there will be tax relief on capital gains if you invest in the proposed bond scheme for the yellow metal.
Finance Minister Arun Jaitley, who had initiated the new policy in his budget speech in February 28, is in the process of giving final touches to what could well turn out be a game-changer for the government in terms of tackling the country’s massive current account deficit. But it may be another two months before the notification for the schemes is made………………………………………..Full Article: Source

India: No FPI Investment in Commodities Till Government Review

Posted on 10 September 2015 by VRS  |  Email |Print

Hopes of commodities market for FPI investment after coming under Sebi’s ambit later this month has been dashed by RBI, which has told the markets regulator to keep any such decision on hold till a policy review is done by the government in this regard.
While the government has issued notifications for merger of commodities markets regulator FMC with capital markets watchdog Sebi with effect from September 28, the revised norms for exchanges and various market participants were notified last month to pave way for the combined regulatory regime………………………………………..Full Article: Source

EU Probing ‘Anticompetitive Behavior in Precious Metals Spot Trading’

Posted on 26 August 2015 by VRS  |  Email |Print

The European Union’s competition watchdog is investigating alleged “anticompetitive behavior in precious metals spot trading,” a spokesman said. The spokesman for the European Commission, Ricardo Cardoso, declined to give more details on the probe.
The Wall Street Journal reported in February that U.S. officials are probing at least 10 major banks for possible rigging of the precious metals market. The U.K. Financial Conduct Authority and German financial watchdog BaFin had previously reviewed the precious metals benchmarks, but closed their inquiries without finding evidence of wrongdoing, people familiar with those probes said at the time………………………………………..Full Article: Source

Commodity trading norms cleared by Sebi

Posted on 25 August 2015 by VRS  |  Email |Print

Setting September 28 as the date for merger of Forward Markets Commission (FMC) with itself, Sebi on Monday announced new norms for commodities derivatives market under which exchanges and brokers in this segment will need to comply with rules applicable to their stock market peers.
The new regulations will also come into force on September 28, the date from which Sebi would begin regulating the commodity derivatives market as a unified regulator. These norms, approved by Sebi’s board here on Monday, will enable functioning of the commodities derivatives market and its brokers under Sebi norms and integration of commodities derivatives and securities trading in an orderly manner………………………………………..Full Article: Source

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