On 12-6-2025, the Securities Exchange Board of India (‘SEBI’) issued ‘Review of provisions relating to Product Advisory Committee (‘PAC’)’ to revise provisions governing PAC in the commodity derivatives segment to streamline regulatory processes, reduce compliance burdens, and enhance market adaptability, particularly for agricultural commodities. This circular came into force on 12-6-2025.
Key Updates on SEBI’s Master Circular:
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SEBI through its ‘SEBI Master Circular for Commodity Derivatives Segment’ dated 4-8-2023, mandated each stock exchange to constitute a PAC for each group or complex of commodities that share common stakeholders or value chain participants.
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SEBI aims to bring changes into the SEBI Master Circular, to regulate the frequency of meetings held by PAC, ensuring efficient trading mechanisms, and addressing stakeholder concerns.
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The revised meeting requirements under the SEBI Master Circular are as follows-
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For non-agricultural commodities– PAC will meet at least twice a year and more frequently as required.
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For agricultural commodities– PAC will meet at least once a year, instead of the previous requirement of twice a year.
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To implement changes recommended by SEBI’s Commodity Derivatives Advisory Committee (‘CDAC’), stock exchanges will be granted greater flexibility in conducting PAC meetings, considering the seasonal nature of agricultural commodities.
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Stock exchanges are directed to:
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Inform their members about the revised provisions;
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Disseminate the circular on their websites for public awareness.
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SEBI acknowledges the unique characteristics of the markets while maintaining robust advisory mechanisms for non-agricultural commodities, as outlined in the SEBI Master Circular.
