The Securities and Exchange Board of India (SEBI) has granted approval to Deutsche Bank to commence commodity custody services to support domestic financial institutions that are looking to trade commodity derivatives. Deutsche Bank in India is the only custodian to have received SEBI approval and is all set to lead efforts to enable participation of institutional investors, such as mutual funds and alternative investment funds in the commodity derivatives segment.
To begin with, the SEBI approval permits commodity custody services in gold, crude and natural gas, and commodity Indices. More broadly, the local government and regulators in India have been focused on developing a vibrant commodities market to improve and stabilise price discovery for both agricultural and non-agricultural commodities.
Deutsche Bank’s Securities Services business, which recently completed 25 years of custody service presence in India, services both domestic and off-shore institutional investors. The bank says it has taken the lead in development of the commodities as an investment avenue for the asset management industry in India.
“We are delighted to be able to provide commodity custody services to domestic financial institutions, who are now be able to add commodities as an asset class to their investment proposition," said Sriram Krishnan, head of Securities Services - India at Deutsche Bank. "This development not only addresses a long-standing demand from institutional investors, but it is also in line with SEBI’s objective to open up the commodities market by enabling asset managers to participate in this important sector, for a start.”
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