Works on commodity derivative advisory committee’s recommendations
Mumbai : It’s been almost a year since Forward Markets Commission (FMC) merged with Securities and Exchange Board of India (SEBI). Since then, SEBI has implemented various regulations to meet the requirements of the commodity market and is still working towards implementation of other norms, revealed SEBI’s chief general manager PK Bindlish.
SEBI’s commodity derivative advisory committee which was set-up under the chairmanship of Ramesh Chand, the member of Niti Aayog, have prepared a recommendation to SEBI. Speaking at CII and Institute of Logistics conference, Bindlish said, “We have received the recommendation and we are working on it.” SEBI is working towards improving the participation of hedges in the market; to make commodity more liquid; to bring more participation in the system; introduce new products; and having an objective regulatory framework for commodity derivative advisory committee. Another major issue in the sector is functioning of warehousing and SEBI hopes to bring new norms to address the issues.
In order to improve function of warehousing in commodity market and to put a robust mechanism in place, SEBI floated a 40-day consultation paper for the public comment. Bindlish said, “We will soon come out with new norms of warehousing for the sector.” The new warehousing norms will address issues of ownership, net worth, distribution, and transparency of the functioning of the warehouses, he stated.
Commenting about the journey SEBI underwent after the merger with FMC, Bindlish said it was a big challenge when it took over because the expectation from SEBI as a mature regulator in the equity market was very high. “But the standard of the commodity market was not as high as standard equity derivative and equity cash market,” revealed Bindlish. In order to meet this standard, SEBI rolled-out various regulatory frameworks. “The biggest challenge was governance of commodity derivative markets. We issued broader guidelines for that.” Bindlish added, “We wanted to bring the commodity market in par with the equity market.”
