Trade in India is governed by Securities and Exchange Board of India (SEBI). Since Sebi handled the regulation of the commodity markets in 2015, it has introduced several rules to ensure transparency, investor protection and Fairtrade practice.

This article suggests that the big SEBI rules should be known by every commodity regulation Market participant -whether you are a businessman, broker, or institutional player.

1. Who Are Commodity Market Participants?

Commodity Market Sebi participants include:

• Handlers and investors

• Brokerage firms

• Clearing members

• Warehousing storage service provider

• Commodity derivatives Exchange (eg, MCX, NCDEX)

Each of these institutions should follow the regulatory structure of the Sebi Commodity.

2. SEBI- Registration is compulsory

• All brokers & intermediaries must be registered with SEBI.

• Sellers should act through SEBI-registered brokers on reputable exchanges such as MCX and NCDEX.

• Sebi Commodities provides a unique registration number (SEBI reg. Number) for each authorized broker.

3. Customer and ownership of ownership money

• Brokers should hold client funds and securities separated from themselves.

• It prevents abuse of customers and improves responsibility.

4. Requirements for margin and risk management

• Sebi is currently making an exposure margin mandatory for trade in goods derivatives.

• Exchange span “standard portfolio analysis of risk” monitors the risk of using systems.

• Mark-to-Market (MTM) settlements are used daily to handle risk.

5. Position Limits

• SEBI sets client-wise, member-wise, & market-wide position limits to prevent market manipulation.
• Violating position limits may result in penalties or trading bans.

6. Status limits

• SEBI sets client-wise, membership-wide positions to prevent market manipulation.

• Violation of the condition area can lead to punishment or a trade ban.

6. Insider trade and inappropriate practice

• SEBI prohibits strictly insider trading, circular trade, front-running, and other unfair practices in the product segment.

• Violation leads to fines, cancellation of a license, or even prosecution.

Final Thoughts

SEBI rules have made commodity trade safely, more transparent and investor -friendly in India. As a market participant, to be obedient not only to save you legally, but also creates self -confidence and reliability.

For the last circular, always see www.sebi.gov.in.

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