The regulator is expected to issue a circular allowing FPIs to trade in non-cash settled, non-agricultural commodity derivatives, broadly in the same form as proposed in its consultation paper.
Sources said the proposal may not require approval from the SEBI board before the circular is issued.
SEBI had released a consultation paper on August 12 seeking views on allowing FPIs to participate in non-cash settled, non-agricultural commodity derivative contracts. The consultation period ended on September 1.
The proposal is aimed at expanding the participation base in commodity derivatives while providing FPIs with another avenue to access India’s commodity markets. Under the proposed framework, FPIs would be allowed to participate in eligible contracts subject to the applicable regulatory and risk-management framework.
The move comes as SEBI continues to fine-tune the framework governing derivatives and market participation.
Separately, SEBI is also reviewing the methodology used to determine settlement prices for derivative contracts following feedback on the new Closing Auction Session (CAS).
Also Read: SEBI to review derivative settlement price methodology after CAS rollout
SEBI introduced CAS in the equity cash segment from August 03, 2026, to determine the closing price of securities. Under the framework, the CAS-derived closing price also serves as the basis for determining settlement prices for derivative contracts on expiry.
“Among the issues raised, a significant area of feedback relates to the determination of settlement prices of derivative contracts on expiry based on the closing price determined through CAS,” SEBI said on September 03.
Having considered the initial experience with CAS and the feedback received, SEBI “may be proposing certain changes in the methodology for determination of settlement prices of derivative contracts”, the regulator said.
A consultation paper outlining the proposed changes is expected to be issued in about a week.
