Fresh guidelines for exchanges' listing soon: Sebi

Says new participants like banks and FPIs will be allowed

As its regulatory ambit widened with FMC's merger, capital markets watchdog Sebi today said it will put in place a new mechanism for entities desiring to operate in both equities and commodities segments.

Besides, fresh guidelines would be put in place with regard to listing of the exchanges, U K Sinha said today after merger of Forward Markets Commission (FMC) with the Securities and Exchange Board of India (Sebi).

While the listing of stock exchanges has been hanging in balance for a long time, one commodity bourse MCX is already listed.

"Our immediate focus is to ensure stability and credibility in commodities markets and also to ensure that there are no disruptions in the way of functioning of commodity exchanges," he said.

Sinha also said that new participants like banks and FPIs (Foreign Portfolio Investors) as well as more products would be allowed.

"These development measures will happen in few months. Right now, our focus would be on placing the regulators environment," he said.

The Sebi chief said the regulator will come out with more guidelines for listing of exchanges in the context of commodities exchanges.

"We were waiting for the merger to happen first," he said.

Sebi will also have a new mechanism for new entities who want to do business in both securities and commodity markets, he said, adding that the focus to ensure high quality physical delivery would be the starting point for the combined regulatory authority.

Speaking at the event to mark the merger, Sebi's whole time member Rajeev Kumar Agarwal said that the regulator will take stock of the NSEL matter subsequently.

"This will have impact on regulatory area as also on the economy at large. It has taken almost 12 years for the merger but globally such steps have taken longer time. Except US and Japan, rest of the world has unified regulatory system so far as securities and commodities are concerned," he said.

Giving credit to Finance Minister Arun Jaitley for navigating through the entire merger process in a timely manner, Sinha said, "I was not sure that such position will be taken up so early and so fast."

He added: "With this merger, there are a lot of expectations from market players and participants. This merger is expected to ring in economies of scope and scale. It will encourage more competition and better price convergence.

"Our effort is that it should help bring simplicity in transaction. Most importantly it should provide a tool to hedge risks for all major stakeholders," he said.

Sinha further said Sebi has made mistakes in the past but learnt from them.

"As far as commodity markets go, we will try to avoid making mistakes and avoid making any mis-steps. We will try for better convergence of prices from physical side," he said.