NCDEX Gets In Principal Approval For Mutual Funds

The National Commodity and Derivatives Exchange has taken a measured step in its long-term shift away from a commodities-only identity. On December 15, 2025, NCDEX received in-principle approval from the Securities and Exchange Board of India to launch a mutual fund transaction platform. While the development may appear incremental, it reflects a clear change in how the exchange plans to shape its future.

For an institution best known for agricultural commodities, the move signals entry into a new financial segment. More importantly, it prepares the ground for NCDEX’s planned move into equity trading in 2026.

A Quicker Entry Point Through Mutual Funds

The mutual fund platform will function separately from NCDEX’s proposed equity systems. This structure allows the exchange to roll out the service sooner, without waiting for the more complex technology and compliance framework required for equity trading. All clearing and settlement will be handled by National Commodity Clearing Limited, a wholly owned subsidiary of NCDEX, keeping transactions within the group.

NCDEX has described mutual funds as the most practical starting point for new investors. Managing Director and CEO Arun Raste has noted that these products often serve as an entry route into regulated markets. By launching this platform first, the exchange can work closely with its members, test settlement processes, and build operational familiarity before introducing equities.

Reaching First-Time Investors Beyond Large Cities

The platform is aimed at rural and semi-urban investors, where NCDEX already has a strong presence through its commodity trading network, farmer-producer organisations, and local intermediaries. By offering straightforward mutual fund products and low-value SIPs, the exchange plans to bring small household savings into formal financial channels.

This approach also helps build investor familiarity with NCDEX over time. As participation grows, these investors may gradually move toward equity investments once the exchange opens its equity segment.

Reducing Reliance on Commodity Trading

The approval is part of a series of steps taken by NCDEX in recent months. In August 2025, the exchange received in-principle approval to launch equity and equity derivatives. This was followed by a Rs 770 crore fundraise in September to support technology upgrades and new business lines. The mutual fund platform received board approval in November, leading to the current regulatory clearance.

The broader objective is to reduce income swings caused by policy restrictions and trading bans in agricultural commodities. By adding mutual funds and later equities, NCDEX is building additional sources of transaction income that are less exposed to sudden regulatory shifts.

The mutual fund platform is expected to go live in early FY27. It is unlikely to challenge established players immediately, but that is not the intent. Its role is to create a steady flow of transactions, deepen member engagement, and prepare the exchange for its next phase. Taken together, the move shows NCDEX choosing a step-by-step path toward becoming a broader financial market institution, rather than attempting a sudden break from its commodity roots.