September 18, 2025

Big news from the world of finance! The Securities and Exchange Board of India (SEBI) is gearing up to open up new doors for banks, insurance companies, and pension funds in the non-agricultural commodity derivatives markets. SEBI Chairman Tuhin Kanta Pandey announced this exciting plan on September 17, 2025. Speaking at an event hosted by MCX, Mr. Pandey said, "We will also engage with the government to consider banks, insurance companies and pension funds to trade in these (non-cash, non-agricultural) markets." That's a huge step for Indian markets! But that's not all. SEBI is also thinking about allowing foreign portfolio investors to join the party and trade in non-cash settled, non-agricultural commodity derivative contracts. By December-end, commodity-specific brokers will be included in a common reporting system for better compliance, added Mr. Pandey. Why is this important? According to Mr. Pandey, commodity derivative markets are a backbone for the economy. India wants to be a 'price-setter,' not a 'price taker' on the global stage. He emphasized the importance of broadening the use of Indian benchmarks both domestically and internationally. In today's volatile world, where prices swing wildly, exchanges can work like safety nets, protecting business profits. Mr. Pandey highlighted the recent doubling of tariffs on aluminium and copper imports by the US, saying it "directly affects" India's exports. He called a strong derivatives market "a powerful shield," helping Indian producers and consumers manage price shocks better. Critical minerals like lithium, cobalt, nickel, and rare earth elements are the stars of the green energy revolution. Mr. Pandey asked, "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?" The question shows SEBI's forward-thinking approach. SEBI promises to keep the commodity markets safe and trustworthy, insisting on real-time margin collection and continuous monitoring as "non-negotiables." Strengthening India's commodity markets is "high" on SEBI's agenda, with committees already formed to deepen agriculture commodity segments and soon to focus on non-agricultural ones including metals. The financial world is buzzing, and SEBI's plans could shake up India's market landscape. Watch this space for more updates!

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Tags: Sebi, Commodity derivatives, Tuhin kanta pandey, Indian markets, Foreign portfolio investors, Financial regulations,