FMC to come out with recommendations on ownership pattern soon

FMC to come out with recommendations on ownership pattern soon
PTI
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First Published: Tue, Dec 11 2007. 11 28 PM IST

Anchor investor: FMC chairman B.C. Khatua.
Anchor investor: FMC chairman B.C. Khatua.
Updated: Tue, Dec 11 2007. 11 28 PM IST
Kolkata: The Forward Markets Commission (FMC) on Tuesday said it would come out with recommendations on ownership pattern in commodity exchanges shortly. “We will submit our recommendations on ownership pattern in commodity exchanges with the ministry shortly,” FMC chairman B.C. Khatua said on the sidelines of a commodity futures market seminar organized by Indian Chamber of Commerce.
Anchor investor: FMC chairman B.C. Khatua.
Khatua said FMC was in favour of an anchor investor in any commodity exchange. The final decision, however, would be taken by the government.
“Commodity exchanges should have an anchor investor who could drive the exchange towards maturity and perfection,” Khatua said.
The chief of the commodity markets regulator said it was in favour of anchor investor from physical market participants such as warehouses and corporates. The anchor investor need not be a single investor, and stakeholders such as companies directly associated with this market and warehouses could also participate.
Khatua called for greater participation of physical market players in a bid to diversify the equity base of the exchanges.
Asked about status of foreign direct investment (FDI) in commodity exchanges, the FMC chairman said the matter was lying with the cabinet committee on economic affairs.
On the ban on trade of rice, wheat, tur and urad on the commodity exchange, Khatua said it was found that fluctuations in these commodities were not due to futures trading and so it was expected that the government would lift the ban before the planting season.
He said lack of physical market and liquidity was the reason behind reducing volume of agri commodities in exchanges.
Asked about Indiabulls Financial Services Ltd.’s application for a commodity exchange, Khatua said FMC was examining the proposal. It was also in favour of multiple commodity exchanges in the growing market.
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First Published: Tue, Dec 11 2007. 11 28 PM IST