Market News
Sebi proposes market making to boost commodity derivatives liquidity
Published 2026-06-09 · Bazaar Watch Research
- Sebi's advisory committee is considering a market-making framework for commodity derivatives.
- This initiative aims to improve liquidity in longer-dated commodity contracts, currently thinly traded.
- Current liquidity is concentrated in near-expiry contracts, hindering long-term hedging for businesses.
- This limits the market's usefulness and puts Indian commodity markets at a disadvantage globally.
- Businesses and hedgers, like jewellers and farmers, will gain better tools for long-term price risk management.
- Commodity exchanges like MCX and NCDEX could experience higher trading volumes across all contract tenures.
- Monitor Sebi's announcements for developments on this framework and its implementation details.
- Evaluate how enhanced liquidity in deferred contracts could create new trading or hedging avenues.