TMI BlogParticipation of Mutual Funds in Commodity Derivatives Market in IndiaX X X X Extracts X X X X X X X X Extracts X X X X ..... ds) Regulations, 1996 is enclosed for implementation. 2. In order to promote institutional participation in Exchange Traded Commodity Derivatives (ETCDs), SEBI has permitted Category III Alternative Investment Funds to participate in exchange traded commodity derivatives vide circular no. SEBI/HO/CDMRD/DMP/CIR/P/2017/61 dated June 21, 2017 and also vide circular no. SEBI/HO/CDMRD/DMP/CIR/P/2018/134 dated October 09, 2018 permitted Eligible Foreign Entities (EFE) having actual exposure to Indian commodity markets, to participate in the commodity derivative segment of recognized stock exchanges for hedging their exposure. In furtherance to this objective, it has been decided to permit mutual funds to participate in ETCDs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ETFs. vi. In case of existing schemes, as mentioned in paragraph 3(v) above, prior to commencement of participation in ETCDs, the scheme shall comply with the provisions of Regulation 18(15A) of SEBI (Mutual Funds) Regulations, 1996 , as this will lead to change in fundamental attributes of the scheme and all unitholders shall be given a time-period of at least 30 days to exercise the option to exit at prevailing NAV without charging of exit load, if any. vii. Prior to participation in ETCDs, the AMCs shall adhere to the following: a) Appoint a dedicated fund manager with requisite skill and experience in commodities market (including commodity derivatives market). b) Appoint a custodia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limit norms, etc. as may be applicable to clients, issued by SEBI and Exchanges from time to time. The position limits at mutual fund level be as applicable to Trading Members . x. Schemes investing in ETCDs shall be benchmarked against an appropriate benchmark. xi. AMCs shall not onboard Foreign Portfolio Investors (FPIs) in schemes investing in ETCDs untill FPIs are permitted to participate in ETCDs. Investment Limits: 4. Participation of mutual funds in ETCDs shall be subject to the following investment limits: i. Mutual fund schemes shall participate in ETCDs of a particular goods (single), not exceeding 10% of net asset value of the scheme. However, the limit of 10% i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite of AMFI by 09:00 a.m. of the following calendar day. ii. The format of monthly and half yearly portfolio may be modified to reflect the investment in ETCDs iii. The total exposure to ETCDs shall be disclosed as a line item in the Monthly Cumulative Report (MCR) submitted by mutual funds. 6. The Recognized Stock Exchanges are advised to: i. make necessary amendments to the relevant bye-laws, rules and regulations. ii. bring the provisions of this circular to the notice of the members of the Exchange and also to disseminate the same on their website. iii. communicate to SEBI, the status of the implementation of the provisions of the circular. 7. All ..... X X X X Extracts X X X X X X X X Extracts X X X X
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