Hedge fund managers will have to share their investment details in commodity derivative markets every month/quarter with SEBI.
In a circular, SEBI has asked hedge fund managers to disclose their holdings in commodity derivative markets periodically to them. In addition, hedge fund managers have to submit a monthly report to SEBI stating the investment exposure to each commodity with effect from September 20, 2017.
Earlier in June, SEBI allowed hedge fund managers to invest in the commodity derivative markets. Hedge fund managers can invest up to 10% of the corpus in a single commodity.
The funds intending to invest in the commodities market will have to make necessary disclosures in the private placement memorandum. Hedge funds also need to take consent from existing stakeholders, with dissenting investors being provided an exit opportunity.
Experts believe that the move will give AIFs an opportunity to invest in more value accretive avenues while at the same time infuse new life into the commodities market.
