SEBI clarifies participation of EFIs in commodity derivatives in IFSC

Mar 22, 2019 | by Avantis RegTech Legal Research Team


The Securities Exchange Board of India (SEBI) on March 18, 2019, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, has issued a Circular to clarify that Eligible Foreign Investors (EFIs) can participate in commodity derivatives. SEBI vide Circular IMD/HO/FPIC/CIR/P/2017/003 dated January 04, 2017 had issued guidelines for participation or functioning of EFIs and Foreign Portfolio Investors (FPIs) in International Financial Services Centre (IFSC).

SEBI clarified that EFIs may participate in commodity derivatives contracts traded in stock exchanges in IFSC subject to the following conditions:

•The participation is limited to the derivatives contracts in non-agricultural commodities only,

•Contracts would be cash settled on the settlement price determined on overseas exchanges, and

•All the transactions will be denominated in foreign currency only.

[Circular No. SEBI/HO/MRD/DRMNP/CIR/P/2019/39]

Click here to download the Circular.


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