SEBI in the process of integrating bourses to create universal exchange

Market regulator Sebi is in the process of integrating its exchanges in order to create a universal exchange, G Mahalingam, a whole-time member of SEBI told Moneycontrol.

A universal exchange is one which offers securities and commodities trading under the same roof. Such exchanges will not have to set up a different entity to offer a platform for commodities trading.

The SEBI move follows the Budget speech given by Finance Minister Arun Jaitely this year when he mooted the idea of integrating commodity and equity exchanges. As a first step towards achieving that goal, SEBI, in October, already integrated market intermediaries such as brokers.

Sebi feels a lot has to be done in creating the right environment for price discovery of an agricultural product.

Sebi is working full swing in taking institutional investors, especially mutual funds, on board. "We are hopeful that soon MFs will participate in the commodity market," added Mahalingam.

With institutional players participating in the market, retail investors will feel emboldened to invest too in commodities. The market regulator is also seemingly working to change the view of commodities as a risky asset class.

In the coming days the regulator will likely open the door for new products and commodities as an asset class will draw more investors.