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Anchor investor shareholding limit in multi-commodity exchanges could be lowered. The Government and the Forward Markets Commission (FMC) are considering revising the limit.
Anchor investor is one who plays lead role in managing a national commodity exchange. At present, such investors can hold up to 26 per cent at the end of the fifth year of an exchange’s operation.
Currently, there are six national multi-commodity exchanges – Multi Commodity Exchange (MCX), National Commodity & Derivatives Exchange (NCDEX), National Multi Commodity Exchange of India, Indian Commodity Exchange, Ace Derivatives and Commodity Exchange and Universal Commodity Exchange.
Policy review
“We are reviewing the policy, because it imposes several restrictions on stakeholders. For instance, a stock exchange cannot have more than five per cent (shareholding), nobody can have 15 per cent, except the anchor investor, who can have up to 26 per cent. So, there are several proposals before us,” Ramesh Abhishek, Chairman of FMC, told Business Line .
The commission regulates commodity exchanges.
Although Abhishek did not elaborate on the proposals, it is believed that the limit could be lowered to 15 per cent.
He did admit that the National Spot Exchange Ltd (NSEL) payment crisis was one of the reasons prompting the change in shareholding cap for anchor investors. NSEL was promoted by the Financial Technologies group (FT), which is also a promoter of the Multi Commodity Exchange and holds 26 per cent in it.
In other exchanges, the Kotak group owns over 26 per cent in Ace, while Anil Ambani’s Reliance Exchange Next and MMTC have 26 per cent each in the Indian Commodity Exchange.
Ramesh said the regulator would go for a public consultation after which “we will propose to the Government what the new policy should be”.
Spot Exchanges
Before the NSEL payment crisis, there were three commodity spot exchanges – NSEL, NSPOT and Ahmedabad-based Spot Exchange. Now, trading activities have been halted at NSEL.
When asked about the other two, Abhishek said, “the Ahmedabad Spot Exchange never became operational, also they never replied to any letter written by us in the past.
“So, we recommended to the Government, I think, a year back, that it should not be given exemption. The other spot exchange is working.”
He said that currently there was no law in the country governing spot exchanges.
The Union Government was considering three separate proposals for enacting a law to regulate spot exchanges.
“One is a draft law which we sent in 2011 to the Department of Consumer Affairs. The second one is regulation drafted by WDRA (Warehousing Development Regulatory Authority) and the third one is draft Bill by the Ministry of Agriculture,” he said.
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