Discuss the impact of the recent actions taken by SEBI regarding commodity markets.
Refer - Business Line
Enrich the answer from other sources, if the question demands
IAS Parliament 5 years
KEY POINTS
Impact of the actions taken by SEBI
Positive
· To permit mutual funds and portfolio managers to transact in commodity exchanges is yet another attempt to improve participation in this segment.
· Punishing the law breakers , SEBI order against those who involved in NSEL scam. SEBI has rejected their applications to offer commodity broking services.
Negative
· SEBI has rejected their applications to offer commodity broking services, din’tcaused disruption in the commodity derivatives market.
· While volumes on commodity exchanges have not been impacted at all, other group companies belonging to these brokers have been issuing statements that they are not particularly affected.
· The SEBI’s directive has been rendered not effective, because the commodity broking operations of the brokers carried out through other entities.
· Even as the regulator was investigating the malpractices of the commodity broking entities, allowing the commodity broking operations to continue in another garb seems meaningless.
The regulator needs to consider whether allowing investors to transact through such entities for other financial services is a sound idea.
