SEBI commodity derivatives: SEBI plans to work with the government so banks, insurance companies, and pension funds can invest in non-agriculture commodity derivative markets. Its chairman, Tuhin Kanta Pandey, said this while speaking at an MCX event on Wednesday. He also mentioned that SEBI is reviewing a proposal to let foreign portfolio investors trade in non-cash settled, non-agriculture commodity contracts.
Pandey explained, “We will also engage with the government to consider banks, insurance companies and pension funds to trade in these (non-cash, non-agricultural) markets.” By the end of December, SEBI will include commodity-specific brokers in a common reporting system for compliance reports, he added, reported ET.
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Commodity derivatives as a shield for Indian economy
Pandey said commodity derivative markets are very important for the Indian economy. He stressed that India wants to become a “price-setter” globally, rather than just a “price taker.” He highlighted the need to make Indian benchmarks more widely accepted at home and abroad. In volatile times, exchanges can act as a good tool for price insurance and help protect profit margins.
The regulator also pointed out that the recent doubling of tariffs on aluminium and copper imports by the US directly affects India’s exports.
“In such a volatile environment, a robust derivatives market provides a powerful shield, allowing Indian producers and consumers to hedge against global price shocks,” Pandey said. He noted that this is especially important for critical minerals like lithium, cobalt, nickel, and rare earths, which are essential for green energy.
Pandey raised a question: “What can our markets do as India pursues its goal of self-reliance in critical minerals? Can we develop financial instruments that help finance and de-risk the exploration and mining of these vital resources?”
Sebi to strengthen market safety
The chairman said SEBI will continue to improve the safety and integrity of commodity markets. Real-time margin collection and continuous monitoring are “non-negotiables” for the regulator.
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He said the watchdog has already formed a committee to suggest ways to deepen the agriculture commodity segment. A working group will also be created to develop the non-agricultural commodity space, including metals.
After Sebi’s comments, MCX shares rose, closing at ₹7,919.45, up 3.51%, while the BSE benchmark rose only 0.38%.
