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SEBI proposes to allow FPIs to participate in commodity derivatives mkt, issues consultation paper

The move is aimed at further increasing depth and liquidity in commodity derivative markets.

February 25, 2022 / 05:31 PM IST
Representative Image: Reuters

Representative Image: Reuters

Markets regulator SEBI has proposed allowing foreign portfolio investors (FPIs) to participate in the exchange-traded commodity derivatives market.

In its consultation paper, the regulator has suggested that FPIs should be allowed to trade in all non-agricultural commodity derivatives and a few selected broad agricultural commodity derivatives, to begin with.

The move is aimed at further increasing depth and liquidity in commodity derivative markets.

"Enhanced liquidity can gradually enable the Indian commodity derivative market to serve as a global benchmark for various commodities thereby shifting India from the role of price taker to a price setter,” SEBI said.