SEBI to Seek Wider Participation in Commodity Derivatives Market

September 17, 2025

New Delhi: Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Wednesday said the regulator will consult the government to widen participation in the country’s commodity derivatives market, including banks, insurance firms, pension funds, and foreign portfolio investors (FPIs).

Push for Institutional and Global Investors

Speaking at a Multi Commodity Exchange (MCX) event, Pandey said SEBI will explore allowing banks, insurers, and pension funds into the commodity derivatives segment. It will also seek approval for FPIs to trade in non-agricultural and non-cash settled commodity derivatives, integrating global investors into India’s commodity space.

Focus on Agricultural and Metal Markets

SEBI has already formed a committee on agricultural commodities, while a new working group on non-agricultural commodities, including metals, will soon be created. Pandey said institutional investors such as mutual funds and AIFs are increasingly viewing metals as an attractive asset class that can enhance risk-adjusted returns.

Strengthening Market Integrity

Pandey underlined that SEBI’s strategy is multi-pronged, balancing market depth with safety. Real-time margin collection and continuous monitoring remain priorities to ensure integrity. Greater institutional participation, he added, will improve liquidity and hedging efficiency.

Compliance and GST Relief

To ease compliance, SEBI will integrate commodity-specific brokers into the Samuhik Prativedan Manch (common reporting platform) by December 2025. The regulator is also engaging with the government to resolve GST-related issues faced by investors delivering or receiving commodities via exchanges.

Awareness Initiatives

Pandey said SEBI will roll out targeted awareness and education programmes to make commodity markets more accessible and useful for a wider set of investors and stakeholders.