SEBI eyes FPIs, mutual funds to deepen commodity derivatives market: Chairman Pandey
On foreign inflows across capital markets, Pandey reiterated SEBI’s continuous drive to streamline registration processes and eliminate procedural hurdles for institutional players
The Securities and Exchange Board of India (SEBI) is actively evaluating policy measures to boost participation, liquidity, and trading volume in commodity derivatives, according to Chairman Tuhin Kanta Pandey. Speaking at the Global Commodity Conclave 2026 in Mumbai, Pandey revealed that inviting Foreign Portfolio Investors (FPIs) and mutual funds into commodity derivatives is aimed at deepening market depth and attracting hedgers to the system.
SEBI has released a Consultation Paper on FPI Participation in Exchange Traded Commodity Derivatives (ETCDs). Pandey emphasized the need for a reliable benchmark price for mutual funds and highlighted that structural improvements are necessary to prevent price manipulation risks and minimize tracking errors for passive investment vehicles.
He also noted that major brokerages are now displaying indicative settlement prices to enhance transparency for investors. Regarding foreign capital inflows, Pandey reiterated SEBI's commitment to streamlining registration procedures for institutional players and reducing procedural hurdles. He clarified that concerns over taxation would remain under the central government's jurisdiction.
Turning to retail trader safety, Pandey expressed concern over ongoing losses among options traders, particularly on contract expiry days, and underscored the operational complexity involved in expiry day options trading. SEBI has submitted proposals to the GST Council Secretariat to align regulatory requirements for commodity deliveries across states, aiming to simplify the registration process through an IGST model.
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