Sebi Tightens Reins on Commodity Advisory Meetings

The Securities and Exchange Board of India (Sebi) has issued a new directive to ensure greater oversight in the management of commodity derivatives. Stock exchanges with commodity segments will now have to hold Product Advisory Committee (PAC) meetings a minimum of twice annually to maintain compliance with the newly revised guidelines.

This move comes under the Master Circular for Commodity Derivatives Segment released by Sebi in August 2023, which outlines various compliance requirements for stock exchanges and clearing corporations operating in this sphere. A key focus of the Master Circular involves forming a Product Advisory Committee for every group of commodities sharing common stakeholders or value chain participants, on which derivatives are actively traded or proposed for the future.

Particularly for agricultural commodities, the revised guidelines specify that these PACs are mandated to meet at least once a year. The new meeting frequency requirements are designed to better reflect the concerns of market participants and result from deliberations by Sebi's Commodity Derivatives Advisory Committee. These changes are effective immediately.

(With inputs from agencies.)