After almost four years, a proposal to bring the commodities derivatives market under the regulatory purview of the capital markets regulator, the Securities and Exchange Board of India, is back on the government’s agenda. In the aftermath of the global financial crisis, the Cabinet Secretary recently discussed the proposal for a common regulator for all financial derivatives with senior officials in the ministries of finance and consumer affairs. The Forward Markets Commission (FMC), the regulator for the commodities derivatives market, reports to the consumer affairs ministry.
According to government officials, the finance ministry has pushed for a broad reform agenda — based on the recommendations of the Raghuram Rajan and Percy Mistry committees — seeking a common regulator in Sebi for all financial instruments, equity, commodities and currency derivatives. Though no decision has been taken, the Cabinet Secretary has asked the two ministries to submit their views in writing.
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