Mumbai: In yet another fallout of regulatory turf war, the National Stock Exchange of India Ltd (NSE) said on Thursday it was indefinitely postponing the launch of derivative products based on gold exchange traded funds (ETFs) after the Forward Markets Commission (FMC) raised objections.

The country’s largest stock exchange had announced earlier this week that it would launch futures and options products based on the commodity on Friday, after it got approval from the capital markets regulator, Securities and Exchange Board of India (Sebi).

“In view of the concerns raised by another regulator, the exchange in consultation with Securities and Exchange Board of India has deferred the launch till further notice,” NSE said in a statement.

The futures and options were to be based on the Benchmark Asset Management Co. Pvt. Ltd’s gold ETF. The fund, which is traded on NSE, closed 0.48% up at Rs1,669.40 on Thursday.

“The futures in gold ETF is as good as gold futures. This falls in our jurisdiction,” said B.C. Khatua, chairman of the commodities market regulator. “Sebi has appreciated this and has taken a constructive view of this.”

This is another example of a regulatory turf war for Sebi, which is engaged in a legal battle with the Insurance Regulatory and Development Authority over unit-linked insurance plans (Ulips)—insurance products that have an investment component.

According to Sebi, since the majority of money is invested in equities, insurers should register with the markets regulator for Ulips.

Similarly, FMC is saying that since gold is a commodity, it has a say in whether exchanges can allow options and futures trading.

While gold futures are allowed and traded in such exchanges as the Multi Commodity Exchange of India Ltd, according to Khatua, the launch of options on gold is “legally untenable”.

The Forward Contracts (Regulation) Act, 1952, prohibits options contracts on commodities.