Finally, FMC to merge with SEBI today

In an industry-first, two regulators - the over 60-year-old Forward Markets Commission (FMC) and capital markets watchdog Sebi - will be merged to create a unified regulatory body.

The move will streamline regulation and curb wild speculations in commodities market, while facilitating further market growth. Currently, there are three national and six regional bourses for commodity futures in the country. Together, all the exchanges clocked a turnover of nearly Rs 60 lakh crore in 2014-15 as against Rs 101 lakh crore the previous fiscal. The announcement was made by Finance Minister Arun Jaitley during FY16 Budget. The merger would be consummated here on Monday at a function to be attended by Jaitley himself, along with Sebi Chairman U K Sinha and officials.

Necessary regulations have been notified to bring into effect the merger. To facilitate the merger, Sebi has created a Commodity Cell, and new departments for regulation of commodities derivatives market. An internal committee was earlier set up at Sebi to evaluate and suggest regulatory changes for merger and prepare a roadmap for the same. The market watchdog has also sought help from Agriculture Ministry with regard to the data sources for the prices and to improve the methodology for determination of final settlement price.

The structure and manpower strength of divisions and departments handling the responsibilty of regulating the commodity derivatives markets has been finalised. The manpower requirement will be met with the officers from FMC (both cadre and deputation) and by new hiring. Till new recruitments are done, suitable officers have been drawn from various Sebi departments. Post-merger, as the divisions start carrying out the activities on a regular basis, based on the volume of work, an assessment of the exact manpower requirements will be carried out in near to mid-term, that is 6-8 months post-merger.

Currently, there are 12 recognised commodity exchanges, out of which six are non-operational.

The operational exchanges include three national and three regional bourses.

FMC has already issued directions to non-operational exchanges including for refund of client money, resolving client disputes and refund of member deposits. (New Indian Express)