'MFs may be allowed to trade in commodity derivatives soon'

 Securities and Exchange Board of India (Sebi) chairman U K Sinha said that the regulator is likely to allow mutual funds to trade in commodity derivatives soon.

 “Mutual funds participation in commodities derivatives would be the first one to happen among institutional investors,” Sinha said.

 Sinha also hinted that the regulator is considering allowing banks and foreign portfolio investors to trade in commodity markets. “Our argument with RBI has been, in any case banks have huge exposure to commodities through the lending programme. We have been asking them to disclose that. Let a beginning be made by the corporates in disclosing that and then you yourself discover there is a need to allow them to hedge also,” Sinha said.