SEBI circular dated January 15, 2021 has clarified the norms for investment and disclosure by Mutual Funds in Exchange Traded Commodity Derivatives(“ETCDs”). The following exposures shall not be considered the cumulative gross exposure :
- Short position in Exchange Traded Commodity Derivatives (ETCDs) not exceeding the holding of the underlying goods received in physical settlement of ETCD contracts.
- Short position in ETCDs not exceeding the long position in ETCDs on the same goods.
Mutual funds shall not write options, or purchase instruments with embedded written options in goods or on commodity futures.
