The Securities and Exchange Board of India (Sebi) said the contracts would be cash-settled on the settlement price determined on overseas exchanges.
Eligible Foreign Investors (EFIs) can participate in commodity derivatives trading on stock exchanges located at the International Financial Services Centre (IFSC), Sebi said on Monday.
However, the participation is subject to certain conditions laid down by the regulator, like it would be limited to the derivatives contracts in non-agricultural commodities only, Sebi said in a circular.
The Securities and Exchange Board of India (Sebi) said the contracts would be cash-settled on the settlement price determined on overseas exchanges.
Besides, the transactions shall be denominated in foreign currency only, the circular added.
FPIs (Foreign Portfolio Investors) were allowed to trade in commodity derivatives on IFSC in 2017 with subject to similar conditions.
In March 2016, the watchdog permitted trading in commodity derivatives at stock exchanges operating at the IFSC.
Gujarat International Finance Tec-City (GIFT City) is the first IFSC in the country.
