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| Banishing CTT, futures ban ok, but merger with SEBI not: FMC |
| Press Trust of India / New Delhi Jul 02, 2009, 17:01 IST |
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The Forward Markets Commission (FMC) today welcomed the Economic Survey's prescribed policy changes about removal of transaction taxes and allowing futures trade in all commodities, but disagreed to the idea of merging the commodity market regulator with Securities and Exchange Board of India (Sebi).
"It is highly premature to talk about merging FMC with Sebi as the purpose of equity and commodity markets are different," FMC Chairman B C Khatua told PTI.
The main function of the Sebi is to mobilise the capital for investment avenues. Whereas, the role of commodity market is price discovery, he said, adding that merging of the two is likely to dilute the market.
"Although the futures market is also a kind of financial market but cannot be merged at present situation in India, as the physical market is still underdeveloped and fragmented," he noted.
The Economic Survey, which was tabled today in Parliament, recommended the government to "bring all financial market regulations under Sebi with a view to encourage integrated development".
Khatua, however, said the recommendation to phase out the commodity transaction tax (CTT) and lifting the ban on futures trading in few agricultural commodities is a positive step.
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