SEBI Proposes Allowing Banks and Pension Funds to Trade Commodities

India’s securities regulator SEBI has initiated discussions with the government to enable banks and pension funds to participate directly in commodity markets. If approved, this change could significantly boost liquidity in commodities like metals and energy, and provide institutional investors new hedging tools. The proposed reform comes as SEBI also considers permitting foreign investors to engage in non-agricultural, non-cash settled derivatives. Markets responded positively, with shares of MCX rising on the news, as investors anticipate more depth and broader participation in commodities trading.