SEBI Chairman Tuhin Kanta Pandey announced a review of position limits and margin requirements in India's commodity derivatives market, with the stated goal of deepening market participation and improving efficiency. The regulator also plans wider access for foreign portfolio investors (FPIs) to the commodity derivatives segment, where overseas participation is currently allowed only in a limited set of commodities and subject to restrictions.

The announcement was reported by CNBC-TV18 on August 12, 2026.

What the review covers

Position limits cap the number of derivative contracts in a commodity that a participant, or a group of participants acting together, may hold. They are a standard regulatory tool used to prevent concentration, cornering and manipulation in commodity markets. In India, such caps are typically applied at the client, trading-member and market-wide levels, and their calibration bears directly on large hedgers — producers, processors and end-users of commodities who rely on derivatives to manage price risk — as much as on other participants.

Margin requirements determine the collateral that traders must deposit with exchanges and clearing corporations to cover potential losses. The calibration of margins affects both the cost of trading and the level of risk and leverage in the system.

Together, these guardrails shape how effectively the market performs its core functions of hedging and price discovery for participants along a commodity's supply chain, which is why recalibrating them is one of the main levers available to a regulator seeking to widen participation without diluting safeguards against manipulation and excessive leverage.

Regulatory and market context

The Securities and Exchange Board of India (SEBI) is the statutory regulator of the country's securities and commodity derivatives markets. It took charge of commodity derivatives in 2015, when the Forward Markets Commission (FMC), the erstwhile commodity market regulator, was merged into it.

Commodity derivatives in India are traded on recognised exchanges, the largest of which is the Multi Commodity Exchange (MCX). The National Commodity & Derivatives Exchange (NCDEX) is a major venue for agricultural commodity contracts. India's commodity derivatives segment remains small relative to the country's equity markets, and the steps taken since the FMC merger — including the 2017 opening of the segment to FPIs — have progressively broadened its participant base while keeping restrictions in place.

FPIs are overseas investors registered with SEBI. They have been permitted to trade in certain non-agricultural commodity derivatives since 2017, subject to position limits and other conditions, and their access to this segment remains narrower than their access to India's equity and debt markets.

Any revisions to position limits, margin requirements or FPI access would be implemented through SEBI circulars issued to exchanges and clearing corporations, the instrument through which the regulator operationalises market rules, typically after seeking public comment.

Source: CNBC-TV18. Related coverage: SEBI proposes wider FPI access to commodity derivatives; impact on MCX.