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Commodity Market regulator

Updated on July 18, 2023

The commodity market in India is regulated by SEBI. It was earlier regulated under the Forward Market Commission which was overseen by the Ministry of Consumer Affairs.

What are the roles and responsibilities of SEBI for the commodity market?

Regulatory Framework: SEBI formulates and implements regulations and guidelines to ensure fair and transparent functioning of the commodity market.

Market Surveillance – SEBI conducts market surveillance activities to detect any irregularities, market manipulation, or unfair practices. It has the authority to investigate and take necessary actions against violators.

Registration and Regulation – SEBI regulates various entities operating in the commodity market, including commodity exchanges, clearing corporations, and intermediaries such as brokers, traders, and warehouses.

Investor Protection – SEBI works towards protecting the interests of investors participating in the commodity market. It ensures that adequate disclosures and safeguards are in place to promote investor confidence.

Product Approval – SEBI approves new commodity derivatives products to be traded on the exchanges after evaluating their suitability and compliance with regulatory norms.

Market Integrity and Transparency – SEBI promotes market integrity and transparency by setting guidelines for price discovery, trading mechanisms, reporting requirements, and dissemination of information.

Risk Management – SEBI mandates risk management practices to be followed by exchanges, clearing corporations, and market participants to maintain market stability and minimize systemic risks.

Surveillance and Enforcement – SEBI employs surveillance systems and mechanisms to monitor trading activities and enforce compliance with regulations. It takes action against any instances of market manipulation, insider trading, or other misconduct.