SEBI Issues Guidelines For Utilisation Of Fund Created For Farmers
The Securities and Exchange Board of India on Monday allowed exchanges dealing with agri-commodity derivatives to utilise the fund created for farmers and FPOs for reimbursement of mandi tax and charges incurred by them on storage and transportation of goods.
The decision was taken based on the recommendations of the Commodity Derivatives Advisory Committee.
SEBI in 2019 asked the exchanges to create a fund for farmers and Farmer Producer Organisations in which the regulatory fee forgone by the regulator would be deposited.
The exchanges were asked to utilise the fund exclusively for the benefit of and easy participation by farmers or FPOs in the agricultural commodity derivatives market.
In a circular, the regulator said due to low participation by farmers and FPOs in the agricultural commodity derivatives market coupled with the challenges posed by the pandemic situation, a sizeable portion of the fund has remained unutilised.
Accordingly, it has been decided to permit the exchanges to utilise the fund for additional activities, including reimbursement of mandi tax and any other mandi cess levied against the goods deposited in warehouses accredited with clearing corporations for the purpose of delivering on the exchange platform.
In addition, the funds can be used for reimbursing the charges incurred by farmers or FPOs towards assaying, cleaning, drying, sorting, storage and transportation in respect of goods.
Further, farmers or FPOs can be incentivised to participate in "options in goods" from the fund.
"For this purpose, the Farmers / FPOs can reimbursed a certain percentage or fixed amount of the premium paid by them, for purchasing 'options in goods' on the exchange platform," SEBI said.
It further said fees levied by Clearing Corporation, if any, on farmers/FPOs in the process of their participation in commodity derivatives trading can be reimbursed.
SEBI said exchanges can revise their action plan for utilisation of regulatory fee foregone by the regulator for FY2020-21 incorporating these activities and the revised plan, if any, will be disseminated on their website.
Further, in order to enhance transparency, the exchanges have been asked tomake disclosure regarding the corpus of the fund and its utilisation, on theirwebsite on a monthly basis.
Also, they have been asked to include the details of the corpus of the fund and its utilisation in the Monthly Development Report.
These directions will be effective from Monday, SEBI said.