After an equity derivatives clampdown, are commodities next for Sebi?

The Securities and Exchange Board of India (Sebi) has asked brokers to submit the profit and profit and loss statements of clients in commodity derivatives for the past three and a half years, two people aware of the development said. "Sebi last week asked top brokers in CDS to submit profit and loss (P&L) statements of their clients relating to trading in gold, silver, crude oil and natural gas futures and options (F&O)," one of the two people said on the condition of anonymity. The regulator has begun seeking clients' P&L data from brokers over three and a half years from fiscal year 2023 (FY23) through FY26 to October in these commodities, the second person confirmed. A query sent to Sebi remained unanswered. After a 40-year ban, derivatives trading in commodity derivatives restarted in India in 2002. The largest commodity exchange is Kotak Mahindra-led MCX. Besides, agri bourse NCDEX, NSE and BSE also offer trading in CDS. Asked if retail investors lose money trading derivatives of commodities like gold, silver, crude and natural gas, the first person cited above said the trend could be similar to that in equity derivatives, where over 90% of individual traders lost a staggering ₹1.05 trillion in FY25. However, he added that the losses would be smaller as the CDS is a tiny fraction of the equities segment. The total options premium turnover of MCX, India's largest commodity derivatives bourse with over 90% market share, stood at ₹5.38 trillion during April-September 2025, less than a tenth of NSE's ₹55 trillion premium turnover in equity index options alone over the same period. NSE is the country's largest stock exchange offering equities cash, equities futures and options, commodity, currency derivatives and bond trading. Shares of MCX hit a fresh high of ₹10,471.5 on NSE on Thursday, before closing up 1.38% at ₹10,424.5. The exchange offers trading in non-agricultural commodities like metals and energy derivatives contracts. Traders include retail, wholesale, corporate hedgers and foreign portfolio investors, the last of which can only trade in cash-settled commodity derivatives. The regulatory demand for commodity derivatives P&L data follows two Sebi studies on equity derivatives. The first study published on 23 September last year, for the period spanning FY22-24, revealed that individual investors lost an aggregate ₹1.8 trillion trading in equity derivatives, particularly weekly index options. Following this, it came out with a series of measures in November to cool the derivatives fever, including rationalizing the number of weekly options per exchange from multiple to just one per bourse. This was followed by a second study released on 7 July this year covering the December 2024 to May 2025 period. The study found that individual losses swelled by 41% year-on-year to an aggregate ₹1.06 trillion. This has driven the regulator to consider the fate of weekly index options, after examining the impact of phased measures to tighten trading from July to December this year and consulting market stakeholders. When asked whether he feared similar strictures in CDS like in EDS, the second person said that he could not be sure, while adding that any attempt to tighten trading similar to that in EDS would "kill the market" that had just begun to develop. The number of unique client codes (UCCs) in CDS at 1.3 million is just 1% of the 120 million-plus in equities, the second person added, providing a perspective on the size of the market. Most of the top brokerages offering equity derivatives trading also offer commodities derivatives trading. Top equity brokerages by clients include Groww, Zerodha, Angel One, Upstox, ICICI Direct and Motilal Oswal Financial Services Group.