SEBI Grants Allowance for Launching Multiple Contracts on the same Commodity in the Commodity Derivatives Segment

On 11th January 2023, the Securities and Exchange Board of India (SEBI) issued Circular No. SEBI/HO/MRD/MRD-POD1/P/CIR/2023/12 in regard to granting allowance for stock exchanges to launch multiple contracts on the same commodity derivatives segment. It is SEBI’s constant endeavour to frame policies which encourage broader participation of investors in the commodity derivatives market. Stock Exchanges have represented to SEBI that due to the requirement of a single contract on a particular commodity, except for gold, silver and precious metals, the participation of investors, especially in metal contracts, is limited.

Stock exchanges have expressed their desire to launch multiple contracts on the same commodity, which caters to all value chain participants. The matter was then discussed in the Commodity Derivatives Advisory Committee of SEBI, and it was decided that the stock exchanges are to be permitted to launch multiple contracts in the same commodity.