In continuation of the decision taken at SEBI board meeting dated June 29, 2022 (available here) to allow Foreign Portfolio Investors (FPIs) to participate in Exchange Traded Commodity Derivatives (ETCDs) market, SEBI has now laid down conditions for participation of FPIs in ETCDs. With this, the existing EFE (Eligible Foreign Entities) route for participating in ETCDs has been discontinued.
Salient features for participation of FPIs in ETCDs are as under:
-FPIs other than individuals, family offices and corporates may participate in eligible commodity derivatives products as ‘Clients’ and shall be subject to all rules, regulations and instructions, position limit norms as may be applicable to clients, issued by SEBI and stock exchanges, from time to time.
-FPIs belonging to categories viz. individuals, family offices and corporates will be allowed position limit of 20% of the client level position limit in a particular commodity derivative contract.
The aforesaid changes have been made vide SEBI Circular dated September 29, 2022 (available here).
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