The Securities and Exchange Board of India (Sebi) has proposed widening the participation of foreign portfolio investors (FPIs) in exchange-traded commodity derivatives (ETCDs), including allowing them to trade in non-agricultural index derivatives and non-cash-settled non-agricultural commodity derivatives. The Commodity Derivatives Advisory Committee (CDAC) has agreed with the proposal. The second proposal seeks to allow FPIs to participate in non-cash-settled or physically settled non-agricultural commodity derivatives available on domestic exchanges. Sebi noted that permitting FPIs in these segments would broaden the participant base, enhance liquidity, strengthen the convergence between the derivatives and physical markets, and facilitate integration of India’s commodity derivatives market with the international commodity market. If they fail to do so voluntarily, their open positions would be automatically transferred to the proprietary account of a designated trading member (TM) or trading-cum-clearing member (TCM).