Participation of Category III Alternative Investment Funds (AIFs) in the commodity derivatives market

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....Dear Sir / Madam, Sub: Participation of Category III Alternative Investment Funds (AIFs) in the commodity derivatives market 1. At present, institutional participants are not allowed to participate in the commodity derivatives market in India. Consequently the commodity derivatives markets in India lack the desired liquidity and depth for efficient price discovery and price risk management. ....

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....y derivatives market, subject to the following conditions: 2.1. Category III AIFs may participate in all commodity derivatives products that are being traded on the commodity derivatives exchanges as 'clients' and shall be subjected to all the rules, regulations and instructions, position limit norms as may be applicable to clients, issued by SEBI and Exchanges from time to time. ....

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.... Foreign Exchange Management Act, 1999 from time to time. 2.6. Category III AIF shall be subject to the reporting requirements as may be specified by SEBI. 2.7. The participation of Category III AIF in the commodity derivatives market shall be subject to the compliance of the provisions of SEBI (Alternative Investment Funds) Regulations, 2012 and circulars issued thereunder. 3....