MUMBAI, Feb. 5 -- The Securities and Exchange Board of India (Sebi) has proposed easing risk-management regulations for clearing corporations in the commodity derivatives market after feedback that some existing safeguards may be more stringent than necessary and could be overstating risk.

In a consultation paper issued on Thursday, the regulator suggested revisiting rules governing the Settlement Guarantee Fund (SGF), which is designed to absorb losses arising from member defaults.

Under the current framework, clearing corporations must run standardized stress tests using 15 years of historical price data. Extreme price movements are capped using a Z-score of 10, a threshold meant to capture exceptionally rare events. Sebi said it has ...