SEBI, the market regulator, is looking to increase institutional participation in agricultural and non-agricultural commodity markets to make them more appealing for hedging, according to chairman Tuhin Kanta Pandey.

Pandey stated at the Bloomberg Forum for Investment Management that SEBI places a high value on strengthening India's agri and non-agri commodities markets.

Key Highlights

• SEBI plans to enhance institutional participation in commodity markets for better hedging.
• Regulator considers allowing banks and pension funds to trade in commodities.

"We are looking to enhance institutional participation to make this market more attractive for hedging," according to him.

He additionally stated: "Deepening our cash equities market and improving the derivatives market is a high priority for us" . Furthermore, the regulator would be thoughtful and consultative when recommending additional measures to improve these markets.

Pandey stated last month that SEBI will "engage" with the government to allow banks, insurance companies, and pension funds to participate in non-agriculture commodity derivative markets.

He stated that the capital markets regulator is also considering a proposal that would allow foreign portfolio investors to trade non-cash settled, non-agricultural commodity derivative contracts.

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Furthermore, the SEBI chief stated that the regulator has taken concrete steps to strengthen the corporate bond market, making it more accessible to both issuers and investors.

The regulator is also looking into bond derivatives as another way to strengthen this segment, he said. Additionally, regulatory reforms and outreach programs are being used to encourage the growth of municipal bonds.