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Commodity exchanges expect a smooth transition to the regulatory regime of SEBI from the Forward Markets Commission with the clear timeline given for meeting different norms.
Parveen Kumar Singhal, Joint Managing Director, MCX, said the new draft regulations announced by SEBI were on expected lines.
However, he said, SEBI should consider restricted membership for physical market participants such as large corporates and bullion traders to trade only on their underlying commodity.
Derivative tradersDrawing a parallel with the currency derivatives where banks are allowed to trade directly, Singhal said bullion traders should be provided with separate membership if they are interested only to hedge their position in gold and silver.
Routing trades through brokers will be a costly proposition, especially when the corporates are interested only in hedging to protect their business interest.
Moreover, he said large corporates generally want to maintain secrecy on their hedging calls and may not want the brokers and other investors to know about it.
On Metro SE stakeAsked whether MCX, now with the deemed stock exchange status, will be allowed to hold 15 per cent stake in Metropolitan Stock Exchange (formerly MCX SX), he said the matter is sub judice and there is no clarity on what happens to the holding above the 15 per cent mark.
MCX owns 2.72 crore equity shares, representing about 5 per cent stake in the stock exchange and 41 crore warrants.
On conversion of warrants, MCX’s holding in the stock exchange will breach the ceiling of 15 per cent. Meanwhile, Metropolitan SE had cancelled MCX warrants worth ₹41.6 crore and added it to its networth as it was not converted into equity within the prescribed timeline — last June. MCX has moved the court against Metropolitan.
“Based on the legal opinion we believe we have a strong case,” he said.
Samir Shah, MD, NCDEX, said SEBI had engaged with the commodity exchanges and market players for last four months and has made a good beginning on the merger process.
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