Mumbai, Sept. 24 -- The Securities and Exchange Board of India (SEBI) on Thursday approved allowing Foreign Portfolio Investors (FPIs) to participate in a wider set of exchange-traded commodity derivatives, with a T-3 day safeguard that requires FPIs to exit their open positions three days before contract expiry to avoid physical delivery obligations.

The decision was taken at the SEBI Board meeting chaired by SEBI Chairman Tuhin Kanta Pandey and is aimed at deepening liquidity in the commodity derivatives market.

Under the new framework, FPIs will be permitted to participate in non-agricultural index derivatives contracts, irrespective of whether the underlying contract is cash-settled or not.

They will also be allowed to participate ...