FMC staffers resist merger with Sebi

Employees, not selected as part of the combined entity, move Bombay High Court

The impending merger of the Forward Markets Commission (FMC) with the Securities and Exchange Board of India (Sebi) has run into a legal hurdle, with a group of employees of the commodities market regulator moving Bombay High Court against the merger.

The employees said they had been left out of the merged entity. Of the 41 FMC employees, 22 have been selected for Sebi; and seven for deputation.

“When the merger was announced, FMC employees were assured their interests would be guarded, and they would find employment. Today, half the FMC employees have not been selected by Sebi. They are fearful for their future,” said a source.

DILUTING THE URGE TO MERGE

• FMC employees file a petition to the Bombay High Court against the Sebi-FMC merger
• Half of FMC employees to be part of the merged entity
• Bombay High Court to hear the case on September 23
• Sebi-FMC merger on September 28

The Bombay High Court will take up the matter on September 23. The Sebi-FMC merger, to be formalised on September 28, was announced in Budget 2015-16.

The finance Bill had said, “Every employee holding any office (excluding members of the commission) under the commission immediately before the date on which the Forward Contracts Act is repealed, will hold office in the central government or the security board, as the central government may notify in the official gazette, for the same tenure and on the same terms and conditions of service as such employees would have held if the commission had not been dissolved.”

The Bill also clarified employees would not be entitled to any compensation for the loss of office due to the repeal of the Forward Contracts Act and the consequent dissolution of the commission, and no such claim would be entertained by any court, tribunal or other authority.

FMC’s left-out employees say they are willing to be part of Sebi, but are being denied the opportunity. “There is no clarity on what would happen to the remaining 19 employees —whether they would go into the surplus pool. If we are sent into the surplus pool, we will not find any reasonable employment for the next six to eight months. This is gross injustice to permanent employees,” said a source.

Sources indicate Sebi has cited inability to house more FMC employees, owing to lack of funds.

In the petition, FMC employees have made Sebi and the Union government party to the case.

An e-mail to the regulator remained unanswered.

FMC employees who have failed to secure appointment at Sebi include permanent employees such as secretary to the chairman and additional directors.

On Friday, Sebi had set up a commodity derivatives market regulation department, for the merger. Sources say within existing securities market departments, additional divisions have been created for surveillance, investigation and enforcement in commodity markets. A total of 22 key Sebi officials, including Sudhakar Khairnar, Sumit Agrawal, and Meetesh Patel, have been appointed in these divisions.