Sebi to harmonise comexes' risk mgt norms, circular next week

They will be harmonised with security mkt norms, as from Monday all exchanges, equity or commodity, will be known as stock exchanges

The Securities and Exchange Board of India (Sebi) is finalising new risk management norms for national and regional commodity derivative exchanges. A circular is likely on Monday, when it takes charge as regulator of the commodity markets, too.

There are differences in margins levied, collateral accepted, collateral haircuts, member deposits and mark to market rules among commodity exchanges. These will also be harmonised with the security market norms from Monday, when all exchanges, equity or commodity, will be known as stock exchanges.

A note prepared by Sebi says, “It is proposed to harmonise the risk management framework across national commodity derivatives exchanges and, as far as possible, align these with that in the securities market.”

The Forward Markets Commission, be subsumed into Sebi on Monday, had attempted to harmonise the risk management norms. A Sebi panel had decided there were gaps, when it had reviewed all regulations of equity and commodity exchanges. There are three regional commodity exchanges and three national commodity exchanges that are active.

Sebi wants commodity derivative exchanges to improve the mechanism to address investors’ complaints. It will ask the comexes to introduce an online platform for redressal of complaints and periodically monitor these. It also wants investors grievance redressal committees, to act in a time-bound manner. An arbitration mechanism has also been proposed. The comexes shall also have to expand the number of investor service centres.