Who Regulates Commodity Trading in India? SEBI and 5 Other Regulators

Ask who regulates commodity trading in India and most answers stop at one word: SEBI. That is right, but not the whole map. SEBI commodity rules cover trades on an exchange. They do not cover the mandi, the jeweller, or the warehouse down the road. Five bodies split the job. Knowing which one owns which piece is the gap between a protected trade and an exposed one.

SEBI has run this market since September 2015

A separate regulator did the job before that. The Forward Markets Commission (FMC) was set up in 1953 under the Forward Contracts (Regulation) Act, 1952. It sat under the Consumer Affairs Ministry for most of its life.

The Finance Act, 2015 ended the split. It repealed the 1952 Act from September 29, 2015. Commodity contracts moved into the Securities Contracts (Regulation) Act, 1956. From September 28, 2015, SEBI took over. India went from two market regulators to one.

Inside SEBI the work sits with the Commodity Derivatives Market Regulation Department. It runs nine divisions. They cover new products, risk, market policy, inspection and complaints.

Four exchanges hold a commodity segment today. They are MCX, NCDEX, NSE and BSE. That list used to be longer. Nine commodity bourses have shut since 2016. The last national one to go was the Indian Commodity Exchange, on December 26, 2024.

What SEBI control looks like day to day

The powers run deeper than most traders assume.

• The goods list. The Central Government notifies which goods may be traded. That list was 104 goods as of March 2026. Only 55 saw actual trades.
• Every contract. No exchange can launch one on its own. In 2025-26 SEBI cleared five futures contracts and two options contracts. The median clearance took 14 working days for the futures.
• Every broker. A commodity broker must hold SEBI registration. As of March 31, 2026, the count was 584 on MCX, 405 on NSE, 303 on BSE and 216 on NCDEX.
• Margins and limits. SEBI sets position limits, daily price bands and margin rules. It also sets the fund rules that clearing houses must follow.
• The off switch. On December 19, 2021, SEBI froze trading in seven farm goods. That ban has been renewed six times. It now runs to March 31, 2027.

The frozen list covers paddy (non-basmati), wheat, chana, mustard seed, soybean, crude palm oil and moong. It also covers products made from mustard seed and soybean. Sit with that for a moment. A regulator that can switch off a whole crop for five years is not a light-touch one.

The part SEBI does not touch

Here is the line most people miss. SEBI's own FAQ is blunt about it. In the spot market, the regulator is the "respective state governments."

So when grain changes hands at a mandi, SEBI has no role. When a jeweller sells gold over the counter, same answer. That gap matters. A goods scheme that promises a fixed return on stock is not a SEBI product. A complaint about it will not travel through SEBI's system.

Who regulates what: the full map

WDRA: the warehouse regulator

Physical delivery needs trusted storage. The Warehousing Development and Regulatory Authority was set up on October 26, 2010. Its parent law is the Warehousing (Development and Regulation) Act, 2007. It registers warehouses. It also runs the electronic warehouse receipt system, which lets a farmer borrow against stored stock.

RBI: the overseas gate

An Indian firm that buys copper abroad may want to hedge on a foreign venue. That route is open. But it runs through the RBI, not SEBI. The FEMA Master Direction on hedging goods price risk overseas allows resident firms to do this via a bank. Individuals are outside that window.

CERC: the power carve-out

Electricity is a notified good, so a turf fight was likely. It ran for a decade. The Supreme Court closed it on October 6, 2021, based on a deal between SEBI and the CERC. Physical delivery contracts go to the CERC. Financial ones go to SEBI. Power futures then went live on MCX on July 10, 2025 and on NSE on July 14, 2025. They turned over ₹16,010 crore in 2025-26.

IFSCA: the GIFT City exception

Bullion trade at the India International Bullion Exchange in GIFT City is not SEBI's. It sits with the International Financial Services Centres Authority. Different rulebook, same country.

Why the merger happened: the NSEL default

Regulators rarely merge for tidiness. In July 2013, the National Spot Exchange defaulted. Court records cite claims of over ₹5,600 crore from more than 13,000 investors. The warehouses held no goods to deliver against.

NSEL was a spot venue. So it fell in the exact gap this article keeps pointing at. The fallout moved the FMC to the Finance Ministry, then ended it. SEBI is still clearing the debris. It opened an NSEL settlement scheme for brokers in July 2025, twelve years on.

What SEBI's own data says

SEBI's Annual Report for 2025-26 shows what it now supervises.

Futures turnover hit ₹166.4 lakh crore, up 133 per cent. Options notional turnover hit ₹1,221.7 lakh crore, up 140 per cent. MCX alone was 98.9 per cent of the total. Bullion was 58.9 per cent of turnover. Energy was 39.7 per cent. Base metals were 1.3 per cent. Farm goods were 0.1 per cent.

The trader split is the real story. In the non-farm segment, prop desks drove 57 per cent of turnover. "Others", which is mostly retail, drove 39.5 per cent. Foreign traders took 2.2 per cent. Hedgers, the people this market was built for, made up 1.2 per cent. Farmers and their bodies rounded to zero.

Delivery says the same thing. Gold delivered on exchange was 2 per cent of the traded amount. Silver was 0.1 per cent. Almost nobody wants the metal. They want the price move. Anyone weighing the risks of commodity trading should read that mix twice.

Four mistakes traders make here

1. Treating every gold scheme as regulated. Gold futures and electronic gold receipts are SEBI products. A shop's monthly gold plan is not.
2. Assuming farm futures are always live. Seven have been frozen since 2021. Check before you build a strategy on one.
3. Thinking the exchange writes the rules. MCX and NCDEX police their own members. But contract terms, limits and margins need SEBI's sign-off.
4. Assuming an overseas goods account is fine. The RBI window is for firms with real exposure. It is not for individuals punting abroad.

How to check a broker before you fund an account

Three checks take five minutes.

First, ask for the SEBI registration number. Match it against the intermediaries list on sebi.gov.in. Second, confirm the firm is on the member list of the exchange it claims to trade on. Third, know the escalation path. Complaints go to SCORES, SEBI's redressal site. Since its 2024 upgrade it targets a fix in 21 calendar days. Disputes that need arbitration go to the SMART ODR portal.

The rulebook itself moves too. SEBI replaced the Stock Brokers Regulations of 1992 with a fresh set on January 8, 2026. Commodity brokers now sit under the same frame as equity brokers. That is exactly what the 2015 merger set out to do.

For more ground work, the commodity trading guide covers the basics. The NCDEX vs MCX piece compares the two main venues. MCX trading hours covers session timings. The commodity glossary decodes the jargon.

Sources: SEBI (FAQs on Commodity Derivatives; Annual Report 2025-26; Press Release 21/2026 dated March 27, 2026; list of recognised stock exchanges; CDMRD page; NSEL settlement scheme FAQs), Press Information Bureau (Ministry of Power release dated October 7, 2021), Reserve Bank of India (FEMA Master Direction on hedging commodity price risk in overseas markets), WDRA and IFSCA. Data as of August 2026.