MCX shares see a sharp spike after these remarks by the SEBI Chairman

Shares of Multi Commodity Exchange of India Ltd. (MCX) rallied as much as 5% on Wednesday, September 17, after Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey outlined a series of reform measures aimed at deepening India’s commodity derivatives market.

Speaking at an event hosted by MCX, Pandey said strengthening India’s commodity markets remains a top priority on SEBI’s development agenda.

He mentioned that the regulator is actively engaging with the government to allow banks, insurers, and pension funds to participate in commodity trading, a move that could broaden institutional involvement.

Pandey also said that SEBI is currently examining a proposal to allow foreign portfolio investors (FPIs) to trade in non-cash settled, non-agricultural commodity derivative contracts.

At present, FPIs are restricted to cash-settled contracts such as crude oil and natural gas futures, where they account for about 5% of overall market volumes and nearly 8% of trades in the energy segment. If permitted to trade in non-cash settled instruments, FPIs would gain access to bullion and base metals as well, which analysts say would boost liquidity and volumes on domestic exchanges like MCX.

The SEBI Chairman further announced that by December 2025, commodity-specific brokers will be included in the Samuhik Prativedan Manch, a common compliance reporting mechanism, in order to simplify and standardize disclosures.

He added that SEBI will continue to work with the government to address goods and services tax (GST)-related hurdles faced by market participants involved in physical delivery of commodities.

These initiatives build on SEBI’s Annual Report released on August 12, 2025, where the regulator had already signaled a review of the existing FPI framework and a possible roadmap to expand their participation beyond cash-settled contracts.

Analysts say the potential regulatory changes are particularly positive for MCX, as they are expected to enhance liquidity, deepen India’s commodity markets, and lift trading volumes across energy, bullion, and metals contracts.