Sebi plans to constitute a working group to review the non-agricultural commodity derivatives segment, chairman Tuhin Kanta Pandey said on Saturday, as the watchdog looks to deepen market participation, improve liquidity and address structural bottlenecks.
“The working group to review the non-agri commodity derivatives segment will be notified shortly,” Pandey said while speaking at the 11th Convention of the Commodity & Capital Participants Association of India (CPAI).
The review is expected to examine the existing regulatory framework for non-agricultural commodities, including margins, position limits, delivery and settlement mechanisms, to assess whether these can be optimised without compromising market integrity.
Sebi is engaging with the RBI and the Insurance Regulatory and Development Authority of India (IRDAI) to enable the participation of banks and insurance companies in the commodity derivatives market. “Enhanced institutional participation will bring in higher liquidity, making the market more attractive for hedging,” said Pandey.
The Sebi chief said the regulator has already constituted expert groups to suggest measures to deepen the agriculture and broader commodity derivatives ecosystem, and their recommendations would guide future developmental steps.
Pandey also pointed to taxation-related hurdles, particularly issues linked to GST. He said Sebi will engage with the government to resolve challenges faced by market participants, especially those involved in physical delivery or receipt of commodities through exchange platforms.
On the gold ecosystem, Pandey said Indian markets already offer regulated products such as commodity derivatives, gold exchange-traded funds and electronic gold receipts (EGRs), which ensure investor protection. He reiterated that EGRs were envisaged to create a regulated gold trading market and position India as a global price discovery hub, but acknowledged that the framework requires a review.
Separately, Pandey said Sebi is planning to constitute a working group to identify the next technological frontier for bourses over the next five to ten years, benchmark global best practices and explore new technologies.