The Securities and Exchange Board of India (SEBI) on January 15 introduced norms for investment and disclosure by mutual funds in Exchange Traded Commodity Derivatives. (ETCDs).
This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996.
As per the circular, SEBI said, “It is further clarified that mutual funds shall not write options, or purchase instruments with embedded written options in goods or on commodity futures.”
In May 2019, SEBI allowed mutual funds to take exposure to Exchange Traded Commodity Derivatives (ETCDs) up to 30% of scheme assets in the multi asset category and 10% in any other category.