"When Markets Surge, Systems Must Hold”: SEBI’s New Capacity Rules for Commodity Derivatives

Commodity derivatives markets move fast, sometimes faster than infrastructure teams can predict. One sharp volatility spike, one surge of algo-driven orders, and suddenly a “normal” trading day starts looking like a stress test.

SEBI’s Circular dated February 11, 2026 on “Capacity Planning and Real Time Performance Monitoring” is aimed at exactly this moment: it nudges Market Infrastructure Institutions (“MIIs”) to treat technology capacity not as an IT back-office issue, but as market integrity infrastructure. Because in commodity derivatives, a system slowdown is not just an inconvenience. It is a market event.

The big picture: What SEBI is really saying

SEBI’s message is simple: plan capacity in advance, monitor it in real time, and act before systems run hot. Earlier, the Master Circular framework for commodity derivatives focused on ensuring the exchange’s trading system could handle load and maintain consistent response time, including in an algo-heavy environment, and it expected the trading system capacity to be at least 4 (four) times the peak order load encountered.

Now, SEBI has moved commodity derivatives closer to the broader MII capacity framework (originally rolled out in December 2024), with customised thresholds for this segment. Think of capacity planning like a safety margin, not spare expense. Capacity planning in commodity derivatives is like building a bridge: you do not design it to carry exactly today’s traffic. You design it to hold up when the trucks come.

1. SEBI now requires installed capacity to be at least 2 (two) times the projected peak load. For example, if an exchange projects that during a major macro event the commodity derivatives segment may hit its projected peak load of 100,000 orders per minute, then installed capacity should support at least 200,000 orders per minute (2x).

   
   

   The keyword here is “projected”. This is not only about what you have already seen. It is also about what you reasonably expect to see.

   
   

2. The “75% rule”, act before you hit the wall:

   SEBI has also built in an early warning sign: if any component’s utilisation exceeds 75% of installed capacity, the MII must take immediate action, either tuning the system or enhancing capacity and the action must be overseen by a designated person. The MII must also document a clear internal framework to handle 75%+ scenarios.

Governance: SEBI wants a policy, not just a dashboard

• This circular is not satisfied with “we have monitoring tools”. SEBI expects a formal Capacity Planning and Real Time Performance Monitoring Policy for commodity derivatives, approved at the right levels and submitted within a fixed timeline.

  
  

• Stock exchanges and clearing corporations must submit this policy to SEBI within 3 (three) months of the circular date, after approval from SCOT and the Governing Board.

  A few example of what a good policy would entail are as follows:

  a. What counts as “critical” systems for commodity derivatives?

  b. How do we define and calculate “projected peak load”?

  c. What happens at 60%, 75%, and 90% utilisation?

  d. What is the escalation chain and response timeline?

In other words, SEBI wants the “what” and the “who” clearly documented, before the market tests your “how”.

What changes from the older regime?

SEBI has expressly stated that this circular supersedes Clause 16.1.2 of the 04 August 2023 Master Circular for the commodity derivatives segment. Practically, that means the compliance anchor shifts from a “4x of peak order load encountered” framing, to a broader capacity and monitoring framework, with a “2x projected peak load” threshold and a “75% utilisation” intervention trigger.

Why it matters to you?

If you are an exchange, clearing corporation, trading member, or even a participant relying on stable market infrastructure, this circular is a reminder that the market’s “fairness” is tied to system performance, capacity is a compliance issue, and system resilience is now part of regulatory expectation, not optional engineering excellence.

Commodity derivatives are where volatility can show up like weather, sudden, localised, and intense. SEBI is essentially asking MIIs to keep the umbrella open before it starts raining.

Key takeaways from the SEBI circular dated February 11, 2026)

1. Commodity derivatives now get a dedicated capacity framework: SEBI has extended the broader “Capacity Planning and Real Time Performance Monitoring” approach to stock exchanges and clearing corporations with a commodity derivatives segment. 

2. Installed capacity threshold is 2x projected peak load: MIIs must size capacity to at least 2 (two) times the projected peak load (forward-looking), not merely what was historically “encountered”. 

   
   

3. “75% utilisation” is the action trigger: If any component’s actual utilisation exceeds 75% of installed capacity, the MII must take immediate action (tuning or enhancement), under oversight of the identified person, and codify the approach in its policy. 

   
   

4. Policy document is mandatory and time-bound: Exchanges and clearing corporations must prepare and submit a Capacity Planning and Real Time Performance Monitoring Policy for commodity derivatives to SEBI within 3 (three) months, after Standing Committee on Technology ("SCOT") and Governing Board approval. 

   
   

5. Effective date is also 3 (three) months: The framework comes into force three months from the circular date, so the implementation window is tight and runs in parallel with policy approval/submission. 

   
   

6. Older “4x peak order load” clause is overridden for commodity derivatives: SEBI has expressly stated this circular supersedes Clause 16.1.2 of the 04 August 2023 Master Circular for the commodity derivatives segment. 

Closing thought

The compliance story here is not just about installing more capacity. It is about installing confidence, that when volumes spike, the market remains orderly, accessible, and fair. Because in commodity derivatives, speed is power. And capacity is control.