New Delhi: Allowing foreign institutional investors (FIIs) in commodity trading is under consideration, but no decision has been taken, the finance ministry on Thursday said. “Many suggestions have come with regard to permitting FIIs into commodity trading. But no decision has been taken. The matter is under consideration. The matter is also under consideration of Sebi,” economic affairs secretary Shaktikanta Das said at the Economic Editors’ Conference here.
“If the Sebi board after taking a view makes recommendation as a regulator, if they permit... if it requires government permission, we will see. But so far, no decision has been taken,” he said. FIIs are also known as foreign portfolio investors. Banks, mutual funds and FIIs are not allowed to participate in the commodity trading like the stock market.
However, commodity trading like stocks is also entirely on non-cash transactions. “It’s the government’s effort to promote all these trading through non-cash means,” he said. In 2014, a five-member committee had said high-cost transactions in commodity futures caused a hindrance to the market and suggested this could be reduced if banks and FIIs were allowed to participate in the commodity market.
