Why in news?
SEBI recently announced a commodity market reform of permitting exchanges to launch options contracts.
What are the changes announced?
- Allowing exchanges to launch options contracts would deepen the domestic commodity market.
- It would provide farmers and other participants a new hedging tool, in a more cost-effective manner.
- Single broking licence - Stockbrokers will be allowed to deal in commodities and vice versa. Within a year, a single licence will be allowed for exchanges as well.
- The move will help the Multi Commodity Exchange (MCX) to launch equities trading, and the National Stock Exchange (NSE) and the BSE to foray into the commodity derivatives space.
- QIB - A qualified institutional buyer (QIB) status on important non-banking finance companies (NBFCs) that have net worth of more than Rs 500 crore is accorded.
- Earlier, NBFCs had to invest in the non-institutional category, which has only 15% reservation.
- The current move will give NBFCs greater play in the IPO market, as nearly half the issue size is reserved for QIBs.
- Monitoring Authority - Capital raised in IPOs could be misused or siphoned off.
- So to ensure transparency in the use of proceeds, all IPOs raising Rs 100 crore or more in fresh equity capital will have to appoint a “monitoring agency”.
- Until now, it was mandatory only for IPOs that raised over Rs 500 crore.
- P notes - Residents and non-resident Indian (NRIs) are not allowed to take direct or indirect exposure to the market participatory notes (p-notes).
- MFs can be bought through e-wallets, such as Paytm, Mobikwik and Freecharge.
- Sebi announced a new framework for consolidation and re-issuance of debt securities aimed at boosting the bond market and infusing more liquidity.
Source: Business Standard
