FPIs Allowed In Commodity Derivatives: How SEBI Plans To Deepen Market Liquidity

In a landmark developmental move, the Securities and Exchange Board of India has officially widened the participation of Foreign Portfolio Investors across exchange-traded commodity derivatives. Addressing market participants' long-standing demands, the capital markets regulator is now permitting overseas investors to enter non-agricultural index derivatives contracts as well as non-cash-settled commodity contracts. To balance deeper market liquidity with systemic stability, SEBI has structured strict operational safeguards. Overseas entities must compulsorily square off their active positions at least three days before contract expiry to completely avoid delivery obligations and local GST complications. If an FPI fails to exit in time, open positions will automatically devolve onto trading and clearing members. Watch this video to decode SEBI's strategic reform and its market-wide implications.