Business Daily from THE HINDU group of publications
Saturday, Nov 11, 2006
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Business Daily from THE HINDU group of publications Saturday, Nov 11, 2006 ePaper |
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Agri-Biz & Commodities
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Commodity Markets Securities tribunal may cater to commodities market Our Bureau
Future course Diverse range of issues affecting commodity exchanges and brokers likely to crop up. Changes likely in rules to provide for allowing appeals.
Kolkata , Nov. 10 The Securities Appellate Tribunal (SAT) may be required to play a dual role, catering to the needs of the commodities market as well. This may necessitate amendment of the SEBI Act, Dr Kewal Ram, Member, Forward Markets Commission (FMC), said. The Commission will have to secure the right appellate mechanism, given the nature of trends that are expected to unfold in the days ahead. There will be a diverse range of issues affecting commodity exchanges and brokers. These will have to be addressed in the most appropriate manner. SAT, which provides the appellate mechanism necessary for addressing cases arising in the securities market, will, therefore, see a growth in stature and significance. In the past, it has had a number of high-profile cases, including one related to Mr Samir Arora, the well-known CIO of the erstwhile Alliance Capital. "We are going in for an appellate mechanism. For this, certain changes may have to be made in existing regulations," Dr Ram said. He was speaking to newspersons after addressing a meeting on commodity futures here on Friday.
Volume growth
The country's commodity exchanges have modern infrastructure, complete with up-to-date technology. There are over 5,000 members, covering more than 1,000 centres. Volumes, which had stood at about Rs 20,000 crore in 2000-01, have increased roughly 100 times in the past four years. All this, added to the continuous vigil by the regulatory bodies, should ensure their growth, it is felt. In particular, agri commodities — with the agriculture sector providing livelihood for 60 per cent of India's population — should benefit from such growth. Once this is ensured on the agriculture front, a lot of downstream activities will pick up and the farming community will stand to gain significantly. At another level, the Forward Markets Commission intends to make sure that risk management and price discovery are done efficiently.
Mapping the future
The Commission expects a number of major developments to unfold in the coming days. These will spawn from the introduction of indices, arrival of new players (like MFs) and foreign participation. FMC is also rooting for a stronger regulatory structure, Dr Kewal Ram said, adding that the idea is to ensure integrity of the players and rationalise costs of entry. Liquidity in the market will play a key role in determining trends. "Even today, despite all the achievements recorded in our commodity markets, we are struggling to create awareness," he said. FMC also aims to arrange a programme for parliamentarians, who it feels should be updated with the latest information on commodity markets.
More Stories on : Commodity Markets | Regulatory Bodies & Rulings
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