Sebi links commodity trade data with its surveillance systems

For better surveillance of commodities derivatives market, regulator Sebi has integrated trading data flow from various commodity exchanges to its own integrated surveillance and intelligence systems.
Following merger of the erstwhile commodity market regulator FMC with it earlier this year, the Securities and Exchange Board of India (Sebi) has become the unified regulator for the entire securities market.
Suspicion of relatively larger-scale manipulations in commodity markets was one of the key issues that eventually triggered the merger.
In order to beef up its regulatory framework for the commodities markets and for more effective checks on any possible manipulations, Sebi has also formed two divisions in its Integrated Surveillance Department (ISD), which have been adequately manned for effective surveillance and monitoring of the commodity derivatives market.

"Each division handles a mix of agri commodities (including cereals and pulses, fibres, oil and oil seeds and spices etc) and non-agri commodities (including energy, precious metals and industrial metals etc) to gain better understanding of working and monitoring of the commodities market," Sebi said in an update report on the FMC merger.
A memorandum was also presented before the Sebi's board at its last meeting.

It further said data acquisition equipment have been installed and connectivity was established with major national commodity derivatives exchanges -- NCDEX and MCX -- thereby integrating trading data with IMSS (Integrated Market Surveillance System) and DWBIS (Data Warehousing and Business Intelligence System) surveillance systems of Sebi.

Data integration has been facilitated in generation of commodity market reports and alerts in DWBIS and IMSS systems. Data from NMCE and regional exchanges are also being received in electronic form through e-mails on a daily basis.
The integration of data in the DWBIS/IMSS system for NMCE, the third national exchange, is in process and likely to be completed shortly, as per the memorandum.
The merger was proposed by Finance Minister Arun Jaitley in his Budget speech for 2015-16 in February this year. Subsequently, the merger was formally announced by Jaitley at an event in this regard on September 28, after which Sebi commenced regulating the commodity derivatives market.

While necessary notifications were issued by the government to make the merger effective, Sebi has been announcing various steps for better integration of the commodities market with the overall securities marketplace.
To take on additional responsibility of regulating the commodity derivatives market, Sebi has also created additional departments and divisions.
The newly-created Commodity Derivatives Market Regulation Department at Sebi itself has four divisions -- Exchange Administration, Market Policy, Risk Management and Products; and Exchange Inspection and Complaints against Exchanges.
Besides, additional divisions have been created for commodity markets in six existing departments of Sebi -- Market Intermediaries Regulation and Supervision Department, Integrated Surveillance Department, Investigations Department, Department of Economic Policy and Analysis, Legal Affairs Department and Enforcement Department.