SEBI vide its Circular dated 10th May 2023 issued to All Recognized Stock Exchanges having Commodity Derivatives Segment All Foreign Portfolio Investors registered with SEBI All Custodians registered with SEBI.
The Circulars state that
In order to promote institutional participation in Exchange Traded Commodity Derivatives (ETCDs), SEBI allowed stock exchanges to extend direct market access to registered Foreign Portfolio Investors (FPIs) with immediate effect.
Direct Market Access (DMA) facilitates the clients of a broker to directly access the exchange trading system through the broker’s infrastructure to place orders without manual intervention by the broker.
Also, DMA provides certain advantages to brokers such as direct control over orders, faster execution of orders, reduced risk of errors associated with manual order entry, maintaining confidentiality, lower impact costs for large orders and implementing better hedging and arbitrage strategies.
Based on representations received for enabling DMA facility to FPIs in ETCDs and deliberations by Commodity Derivatives Advisory Committee (CDAC) of Sebi, it has been decided to allow stock exchanges to extend DMA facility to FPIs for participation in ETCDs.
This permission is subject to certain conditions that require brokers to follow procedure for application for DMA, operational specifications, client authorisation, and broker-client agreement, risk management, among others.
The provisions of circular issued on September 29, 2022 allowing FPIs to participate in ETCDs shall remain applicable.
Link : https://www.sebi.gov.in/legal/circulars/may-2023/direct-market-access-dma-to-sebi-registered-foreign-portfolio-investors-fpis-for-participating-in-exchange-traded-commodity-derivatives-etcds-_71069.html
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