SEBI Modifies Criteria for Introduction of Commodity Options


May 27, 2024 saw SEBI issue a circular to all Managing Directors and Chief Executive Officers of stock exchanges having commodity derivatives segments. The circular puts forward new eligibility conditions for launching options with commodity futures as underlying assets.

Revised Eligibility Criteria

SEBI, the market regulator, has set updated criteria based on feedback from market participants and discussions by the Commodity Derivatives Advisory Committee (CDAC). The major update is on daily turnover requirements for agricultural and agri-processed commodities.

Key Changes

Agricultural and Agri-Processed Commodities

For launching options contracts on agricultural and agri-processed commodities, the average daily turnover of the underlying futures contracts during the previous twelve months will be Rs 100 crore as against the previously set Rs 200 crore requirement.

Other Commodities

The current requirements are still applicable to other commodities. In terms of average daily turnover of underlying futures contracts during the past year, it must not be less than Rs 1000 crore.

Revised Master Circular

The specific change in paragraph 6.1.2. of Master Circular on Eligibility Criteria For Launching Options On Commodity Futures is thus:

Options shall be allowed for trading on a stock exchange only for those commodity futures that are traded at its platform subject to the following requirements being met

Average daily turnover of underlying futures contracts of respective commodity over preceding twelve months shall not be below:

  • Rs 100 crore for agricultural and agri-processed commodities
  • Rs 1000 crore for other commodities


This circular applies to all options on future contracts (both agricultural and agri-processed commodities) which are introduced from June 1st, 2024 onwards. It should have an average daily turnover in respect of such underlying future contracts in the last twelve months not less than Rs hundred crores.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.