The Securities and Exchange Board of India (Sebi) on Monday took over the reins of the commodities derivativesmarket. Assuaging concern that surveillance and regulation would assume priority over development, SebiChairman U K Sinha said new products and participants could be introduced in a few months.
At an event at which Finance Minister Arun Jaitleyformalised the merger of the Forward MarketsCommission (FMC) with Sebi, the market regulator said it was open to allowing products such as options and index futures in the commodities market, as well as new participants such as banks and foreign portfolio investors.
“Our immediate focus is to ensure stability and credibility in the commodities markets and ensure there are no disruptions in the functioning of commodity exchanges,” Sinha said. “Our efforts would be to move in a cautious direction to ensure we provide some comfort to the market and to all participants, that the way transactions in commodities futures are at least as robust as they are in the securities market.”
Jaitley said, “The merger will increase the economies of scope and scale, as there are strong commonalities between all kinds of trading. I am sure Sebi is prepared to regulate the commodity derivatives market.”
Shaktikanta Das, secretary in the Department of Economic Affairs, said “A balance is needed on price stability and policy certainty. Sebi has to ensure prices do not become volatile and, at the same time, also see that there is policy certainty.”
The market regulator also assured it would soon put in place a framework for listing of stock exchanges. Following the Sebi-FMC merger, India's only listed bourse, the Multi-Commodity Exchange, will de facto be listed under Sebi regulations.
The regulator is set to come out with additional guidelines for listing of exchanges. "We were waiting for the merger to happen first," Sinha said.
Established in 1953, FMC oversaw the commodities market for about 60 years. It, however, lacked various powers, which resulted in inadequate surveillance and alleged irregularities in this segment. To check these, a merger with Sebi was proposed 12 years ago and, subsequently, by two reports — one by a finance ministry-constituted panel and the other by the Financial Sector Legislative Reforms Commission. In 2010, the government also proposed amendments to the Forward Contracts and Regulations Act (FCRA).
Source : http://www.business-standard.com/article/markets/new-products-participants-in-commodities-derivatives-market-in-few-months-115092800993_1.html
At an event at which Finance Minister Arun Jaitleyformalised the merger of the Forward MarketsCommission (FMC) with Sebi, the market regulator said it was open to allowing products such as options and index futures in the commodities market, as well as new participants such as banks and foreign portfolio investors.
“Our immediate focus is to ensure stability and credibility in the commodities markets and ensure there are no disruptions in the functioning of commodity exchanges,” Sinha said. “Our efforts would be to move in a cautious direction to ensure we provide some comfort to the market and to all participants, that the way transactions in commodities futures are at least as robust as they are in the securities market.”
Jaitley said, “The merger will increase the economies of scope and scale, as there are strong commonalities between all kinds of trading. I am sure Sebi is prepared to regulate the commodity derivatives market.”
Shaktikanta Das, secretary in the Department of Economic Affairs, said “A balance is needed on price stability and policy certainty. Sebi has to ensure prices do not become volatile and, at the same time, also see that there is policy certainty.”
The market regulator also assured it would soon put in place a framework for listing of stock exchanges. Following the Sebi-FMC merger, India's only listed bourse, the Multi-Commodity Exchange, will de facto be listed under Sebi regulations.
The regulator is set to come out with additional guidelines for listing of exchanges. "We were waiting for the merger to happen first," Sinha said.
Established in 1953, FMC oversaw the commodities market for about 60 years. It, however, lacked various powers, which resulted in inadequate surveillance and alleged irregularities in this segment. To check these, a merger with Sebi was proposed 12 years ago and, subsequently, by two reports — one by a finance ministry-constituted panel and the other by the Financial Sector Legislative Reforms Commission. In 2010, the government also proposed amendments to the Forward Contracts and Regulations Act (FCRA).
Source : http://www.business-standard.com/article/markets/new-products-participants-in-commodities-derivatives-market-in-few-months-115092800993_1.html
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