What's on the table
SEBI is considering easing how big traders can go in non‑agricultural commodity derivatives, while also reworking how certain agriculture contracts settle. The aim is to broaden who takes part in India's fast‑growing commodity derivatives market, cut friction for hedgers, and make sure higher activity actually improves liquidity and price discovery.
Pandey outlined the ideas at a New Delhi convention, noting SEBI wants to deepen trading and market depth without loosening the guardrails that keep risk in check.
How settlement could shift
After consultations, SEBI is drawing up guidance to revise settlement rules for select agricultural derivatives. Pandey argued that forcing physical delivery from day one can stunt a contract's growth. As he put it, "A phased approach can allow the contract to mature before physical settlement becomes mandatory."
He also cautioned that bigger volumes alone are not a scorecard for progress, saying, "Success must be measured not by turnover alone, but by how effectively these markets help manage risk."
Rule changes in commodity markets decide what you pay for food and fuel months before prices move. Market Briefs follows them free every morning.
The market's growth spurt
Over the first six months of the fiscal year that started on April 1, futures and options posted notional turnover of roughly 1,538 trillion rupees, about $16 trillion. That already tops the full previous year by 11%, according to Pandey. In the year ended March, bullion dominated, accounting for about 59% of notional turnover.
SEBI is also continuing talks on goods‑and‑services tax frictions that hit participants who take or make delivery of commodities via exchange platforms. Separately, it is reviewing how settlement prices are determined on derivatives expiry days. Beyond derivatives, the regulator wants to deepen cash markets through broader participation, a more robust securities lending and borrowing ecosystem, and smoother hedging and arbitrage.
What's already changed and why it matters to you
Some doors are already open wider: SEBI has expanded overseas investor access to commodity indexes and to physically settled non‑agri contracts. It has also rolled out electricity futures and weather derivatives, widening the set of risks market users can hedge.
If these steps do what SEBI intends, you could see tighter pricing and more reliable hedging tools across commodities. For anyone exposed to energy, metals or farm inputs in their business or personal budget, that can mean more predictable costs and fewer unwelcome surprises when prices jump.
Regulators rewrite market plumbing constantly, and almost nobody reports it clearly. Join the free Market Briefs daily newsletter and keep up.
