Commodity market regulator Forward Markets Commission has amended regulations for corporate governance and independent director in commodity exchange. The regulator has now aligned the norms in line with the new Companies Act.
The new FMC norms lays emphasise on appointment of different committees to assist the management take decisions. To start with, it has suggested formation of eight committees, including the one on technology.
The revised norms for commodity exchanges come at a time when investors’ confidence in commodity futures market is shattered by the ₹5,600-crore scam in the National Spot Exchange promoted by Financial Technologies. Though spot exchange was largely unregulated, the latest audit report has pointed out major discrepancies in MCX which was under the supervision of FMC.
FMC has barred trading members, clearing members, their associates and agents and foreign institutional investors from the exchange board. These people are also not allowed to become the Managing Director of an exchange. FMC has restricted independent director tenure to three years with an option of one renewal. This apart, an independent director can be on the board of only one commodity exchange at a time.