Foreign Portfolio Investors Granted Wider Access to Commodity Derivatives Under SEBI's 2026 Rules

New Delhi, September 24 – In a significant move, SEBI has expanded the scope for foreign portfolio investors (FPIs) to engage in exchange‑traded commodity derivatives. The decision, part of the 2026 PMS regulatory overhaul, aims to strengthen liquidity and deepen the commodity derivatives market.

FPIs are now permitted to trade non‑agricultural index‑based derivatives, irrespective of whether the underlying contracts settle in cash. They can also participate in non‑cash‑settled commodity derivatives, provided they exit their positions before the delivery obligation period commences. The exit window opens three days prior to contract expiry, ensuring orderly unwinding.

Additionally, FPIs are barred from increasing their positions after the T+3 day mark, a measure intended to curb speculative excesses close to delivery dates. These safeguards complement the broader reforms that also allow PMS managers greater flexibility in IPO, primary debt, and foreign security investments.