SEBI cleared FPI participation in 2 new commodity derivative categories, allowing non‑agricultural index and non‑cash‑settled contracts.
Under the new framework, FPIs can trade in non‑agricultural index derivatives regardless of cash settlement, and in non‑cash‑settled non‑agricultural commodity derivatives. They must exit positions before the tender period, which starts three days prior to contract expiry.
The regulator also requires FPIs to formalise agreements with their trading member or trading‑cum‑clearing member on pre‑delivery square‑offs. Residual positions before the tender period may be transferred to the TM/TCM at the exchange’s closing or daily settlement price.
SEBI stated the decision aims to deepen liquidity while keeping FPIs out of physical delivery. Commodity exchanges such as MCX, BSE, and NSE stand to benefit from a broader participant base, potentially increasing depth in the newly eligible contracts.
Analysts project that the expanded FPI access could lift commodity‑exchange stocks by up to 1% as increased inflows boost trading volumes in the coming days. Traders will be watching the first intraday session for signs of the new rules taking effect.