Norms for FDI/FII in comexes soon

The Reserve Bank of India is likely to issue guidelines for allowing foreign investors to pick up stake in the country's commodity exchanges within a fortnight, a top government official said today.

"We expect that the RBI will issue necessary guidelines allowing foreign investment in commodity exchanges in another 15 days," Consumer Affairs Secretary Yashwant Bhave said. The RBI guidelines are expected to be similar to those issued for stock exchanges, he added.

This means that foreign investors will be allowed to buy up to 49 per cent stake in bourses such as the Multi Commodity Exchange and the National Commodity and Derivatives Exchange.

The apex bank had in last December allowed foreign investment up to 49 per cent in stock exchanges.

While the FDI cap was pegged at 26 per cent, foreign institutional investors (FIIs) were allowed to take up to 23 per cent stake. However, individual investor can hold only up to 5 per cent stake.

Consumer Affairs Ministry had sent its recommendations to RBI regarding foreign investment in commodity exchanges about a month ago.

Following world's top investment banking company Goldman Sachs buying stake at NCDEX, commodity regulator Forward Markets Commission had asked all exchanges not to change their shareholding pattern till guidelines were issued.

Goldman Sachs picked up 7 per cent equity in NCDEX at $23.1 million from ICICI Bank in July last year. However, the FMC directive did not allow the New York-based investment banker to increase its stake by buying the remaining 8 per cent equity held by ICICI Bank.

Apart from ICICI Bank and Goldman Sachs, Life Insurance Corporation of India, National Bank for Agriculture and Development and National Stock Exchange hold 15 per cent each in NCDEX, while CRISIL and IFFCO hold 12 per cent each. Canara Bank and Punjab National Bank also hold 8 per cent stake each.

On the other hand, the leading commodity exchange MCX can come out with its IPO once RBI issues the necessary guidelines on foreign investment, a commodities analyst said.

MCX is waiting for the RBI guidelines before launching its IPO, though the exchange earlier sold its 9 per cent stake to Fidelity International. New York Mercantile Exchange (Nymex) is keen to buy stake in both NCDEX and MCX, market sources said.