SEBI permits participation of Foreign Portfolio Investors in Exchange Traded Commodity Derivatives in India


The Securities Exchange Board of India vide circular dated September 29, 2022 has permitted participation of SEBI registered Foreign Portfolio Investors (FPIs) in Exchange Traded Commodity Derivatives in India(ETCDs). It has been decided to allow foreign investors to participate in Indian ETCDs through the FPI route, subject to conditions following prescribed by SEBI:

  1. To begin with, FPIs will be allowed to participate in cash settled non-agricultural commodity derivative contracts and indices comprising such non-agricultural commodities.
  2. FPIs desirous of participating in ETCDs shall be subject to risk management measures applicable, from time to time.
  3. Position Limits: A.FPIs other than individuals, family offices and corporates may participate in eligible commodity derivatives products as ‘Clients’ and shall be subject to all rules, regulations and instructions, position limit norms as may be applicable to clients, issued by SEBI and stock exchanges, from time to time. B. FPIs belonging to categories viz. individuals, family offices and corporates will be allowed position limit of 20 per cent of the client level position limit in a particular commodity derivative contract.

The participation of FPIs including individuals, family offices and corporates shall be subject to compliance with the provisions of SEBI(Foreign Portfolio Investors)Regulations, 2019, SEBI (Custodian) Regulations, 1996 and other applicable SEBI circulars on ETCDs.

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