SEBI proposes allowing FPIs broader participation in commodity derivatives with T-3 settlement, position transfer rules, and risk controls.
Expanding Foreign Access to Commodity Markets
SEBI has proposed allowing Foreign Portfolio Investors (FPIs) wider access to commodity derivatives markets. The move includes restrictions such as T-3 settlement cycles, transferability of positions, and prudential risk management frameworks to prevent speculation and market manipulation.
The proposal, detailed in a Board memorandum, seeks to deepen liquidity in Indian commodity futures while maintaining systemic stability. Eligible derivatives include bullion, energy, and agricultural contracts traded on SEBI-regulated exchanges.
Law firms advising FPIs and domestic exchanges must now assess compliance with proposed position limits and reporting timelines. The framework may require amendments to client agreements and risk disclosure documents for derivatives trading desks.
Citations
- SEBI Board Memorandum on Commodity Derivatives, 2026