FMC looks for non-Mumbai auditors

The Forward Markets Commission (FMC) has decided to appoint auditors living in the vicinity of commodity exchanges to save the costs of transporting them to audit the books of accounts of the commodity bourses and their members.

The commodities market regulator has invited expression of interest from empanelled private auditors, preferably living outside Mumbai.

"If a member resides in Delhi, it makes sense to send auditors from Delhi there. Sending auditors from Mumbai to every part of the country only increases expenses," said Anupam Mishra, director of the FMC.

"In the first phase, we have appointed auditors from Mumbai for local exchanges and their members. Now, we are willing to strengthen the auditing team by recruiting auditors outside Mumbai in the second phase," Mishra added.

This was the beginning of the process that would finally end with a five-member committee finalising the auditing team after looking at the responses from private chartered accountancy firms, he said.

The committee would inspect the candidates' past track record and auditing experience in the realm of commodities trade and institutions such as the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India. Last year, the FMC appointed five private independent auditors, who found some shortcomings in the books of accounts. But, the regulator had not yet acted firmly on the issue probably because they lacked power, said Mohan Natarajan, director of Kotak Commodity Services.

The FMC is trying to tighten the norms for defaulters by auditing their accounts. However, trading houses dealing in both equities and commodities would be least worried as they were already adhering to all the Sebi norms, he added.

The professional fee for auditing commodities exchanges has been set at Rs 100,000 and for members of exchanges it is Rs 35,000, inclusive of service tax and out-of-pocket expenses, if any.