SEBI is considering a pilot that would let certain agricultural commodity derivatives trade as cash settled instruments before mandatory physical settlement. The plan is meant to improve liquidity and market confidence in agri contracts. SEBI is reportedly evaluating commodities such as maize, groundnut, and chilli for the trial, with further details expected.
MCX shares fell about 3% after SEBI indicated that banks and insurers are unlikely to be allowed to participate in commodity derivatives. SEBI chief Tuhin Kanta Pandey said the regulator will not push the proposal further with the Reserve Bank of India, sparking investor concern about future participation and liquidity in the market.
Your news, in seconds
Get the Beige app — every story in 60 words, updated hourly. Free on iOS & Android.
SEBI chairman said banks and insurance companies will not be allowed to invest in commodity derivatives. The regulator had earlier discussed allowing pension funds to trade commodities, but that decision has not been disclosed. The stance immediately hit sentiment, with shares of the Multi Commodity Exchange of India falling after the development.
HDFC Mutual Fund says its HDFC Gold ETF will stay focused on physical gold, but will switch to exchange traded commodity derivatives only during temporary shortages. In line with SEBI guidelines, the move also allows limited exposure to gold delivery and settlement mechanisms and other eligible gold instruments, expanding flexibility without changing the ETF’s core physical intent.
Swipe through stories, personalise your feed, and save articles for later — all on the app.
