MUMBAI (TIP): In an attempt to make the commodity derivatives trading safer for investors, Sebi has come out with a consultation paper on how comexes should deal with warehouses registered with them. It has specified minimum standards for warehouses which want to be part of the commodity derivatives space in the country.
Among the areas which the proposed regulations will cover include financial parameters like equity capital and networth, track record of promoters and real time access of stored commodities for exchanges.
In India, warehouses—which play an important role in the commodities trading space that include the spot as well as derivatives trading—are regulated by Warehousing Development and Regulatory Authority. However, since these facilities play an important role in the commodity derivatives space, which has been under Sebi’s regulatory purview since September 2015, it wants to have stricter norms that will define how comexes deal with warehouses, Rajeev Kumar Agarwal, whole time member, Sebi, said.
Sebi has proposed that promoters of warehouses which will store multiple commodities should have a net worth of at least Rs 50 crore. while the ones which will store a single commodity the required net worth will be Rs 25 crore. The minimum equity capital for the company owning these warehouses should be Rs 10 crore. Warehouses should also have a minimum security deposit of Rs 50 lakh.
The promoters, directors and the top officials of the warehouses should be a ‘fit and proper’ person under Sebi rules and should not have any record of violations of securities laws in the previous three years.