Capital market regulator the Securities and Exchange Board of India (Sebi) on Wednesday announced the much-awaited commodity market reform of permitting exchanges to launch options contracts. The move would deepen the domestic commodity market and provide farmers and other participants a new hedging tool, in a more cost-effective manner. 

Sebi also announced a single-licence regime, allowing stockbrokers to deal in commodities and vice versa. It said within a year, it would allow a single licence for exchanges as well. The regulator accorded a qualified institutional buyer (QIB) status on systemically important non-banking finance companies (NBFCs). 

These have net worth of more than Rs 500 crore. The move will give NBFCs greater play in the IPO market, as nearly half the issue size is reserved for QIBs. Earlier, NBFCs had to invest in the non-institutional category, which has only 15 per cent reservation.

What came out of the meeting

Launch of options in commodity derivatives: Announces reform, allowing options trading in commodity market.

Single brooking licence for equities and commodities: Stockbrokers will be allowed to deal in commodities and vice versa. Within a year, Sebi plans a single licence for exchanges as well.

NRIs blocked in P-notes: Sebi clarified and strengthened the regulations to bar resident and non-resident Indians from taking direct and indirect exposure to Indian markets through P-notes.

Tighter monitoring of IPO proceeds: Mandatory ‘monitoring agency’ for IPOs above Rs 100 crore to ensure adequate supervision and utilisation of funds raised.

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