Sebi issues draft norms for commodity indices

Sebi Wednesday issued draft norms for commodity indices, proposing a maximum weightage of 20 per cent for a constituent.

Besides, the watchdog has proposed rules for product design for future on the indices as part of larger efforts to deepen the participation of institutions in the derivatives segment.

Only contracts that are compliant with certain conditions would be allowed to be part of the indices. The contracts should have traded for at least 90 per cent of trading days in last 12 months and they should have a minimum average daily turnover. The turnover should be at least Rs 75 crore for agricultural and agri-processed commodities, and Rs 500 crore for all other commodities, as per the draft norms.

Before re-balancing an index, the future contracts concerned should have been trading in the particular exchange for at least 12 months.

Regarding weightage, any constituent in index would have a maximum weightage at 20 per cent and minimum at 1 per cent. The weightage of the index ..