Mumbai: The Union Cabinet’s decision to issue an ordinance to give autonomy to the Forward Markets Commission (FMC) is seen as a move that will help build the confidence of investors - be it investment or mutual funds, financial institutions or small traders.
“It is a positive signal to the commodities market that could now witness broad-based participation of players who matter rather than a handful of speculators,” said an official with a commodities advisory firm.
Indication
The move on ordinance is a silver lining to the commodity markets that would pave way for “progression towards a more mature market. Although we are long way to go, the ordinance would change the face of Indian commodity markets as it gives more power to the regulator FMC,” said Si. Kannan, Associate Vice-President of Kotak Commodity Services Ltd.
Enabling growth
According to Joseph Massey, Deputy Managing Director of MCX, the Centre’s approval of the ordinance before the passage of the Forward Contracts (Regulation) Bill (FCR) will enable the industry to grow on the lines of global exchanges. “The bill provides greater autonomy to FMC for better regulation of the market and it also allows the launch of new products such as options and indices. The participation of banks, FIIs and institutional investors was in some way linked to the approval of this Bill. With the autonomy of FMC, we believe, that these institutions will now be allowed to participate in commodity futures market,” he said.
• Quarterly results of corporates: Check out
Ravinder Sachdev, Head (Legal) of NCDEX said: “FMC will now be able to impose financial penalty on errant members and also regulate intermediaries like warehouses, depository participants and others. The investors who are not satisfied with an FMC order can appeal to the Securities Appellate Tribunal and then the Supreme Court.”
Kannan said that the Government had finally turned pro-active in allowing greater freedom to the commodity market regulator and hence, improving the market by way of ordinance as the final amendment in the Parliament might take some time. “Product innovations are a key to market strength and success and this ordinance, by allowing greater powers to FMC, would pave the way for products like option on futures, index futures and option, and weather derivatives. And more importantly the Indian market will have a commodity index (that may be tradable) for the world to look at, similar to ones in the developed countries,” he said.
FMC powers
The move to arm FMC with more power would give retail investors a platform to play safe, by way of portfolio management that is restricted now. Further, new product innovations like option on mini futures and structured products that are very popular in the capital market might be replicated in the commodity market if FMC wishes to do so, he said.
“Also, FMC can levy penalty, charge fees, take their own decisions like SEBI and can allow new product developments and amendments, enabling the decision making process to be faster in the much-needed commodity market,” Kannan said.
“It is a positive signal to the commodities market that could now witness broad-based participation of players who matter rather than a handful of speculators,” said an official with a commodities advisory firm.
Indication
The move on ordinance is a silver lining to the commodity markets that would pave way for “progression towards a more mature market. Although we are long way to go, the ordinance would change the face of Indian commodity markets as it gives more power to the regulator FMC,” said Si. Kannan, Associate Vice-President of Kotak Commodity Services Ltd.
Enabling growth
According to Joseph Massey, Deputy Managing Director of MCX, the Centre’s approval of the ordinance before the passage of the Forward Contracts (Regulation) Bill (FCR) will enable the industry to grow on the lines of global exchanges. “The bill provides greater autonomy to FMC for better regulation of the market and it also allows the launch of new products such as options and indices. The participation of banks, FIIs and institutional investors was in some way linked to the approval of this Bill. With the autonomy of FMC, we believe, that these institutions will now be allowed to participate in commodity futures market,” he said.
• Quarterly results of corporates: Check out
Ravinder Sachdev, Head (Legal) of NCDEX said: “FMC will now be able to impose financial penalty on errant members and also regulate intermediaries like warehouses, depository participants and others. The investors who are not satisfied with an FMC order can appeal to the Securities Appellate Tribunal and then the Supreme Court.”
Kannan said that the Government had finally turned pro-active in allowing greater freedom to the commodity market regulator and hence, improving the market by way of ordinance as the final amendment in the Parliament might take some time. “Product innovations are a key to market strength and success and this ordinance, by allowing greater powers to FMC, would pave the way for products like option on futures, index futures and option, and weather derivatives. And more importantly the Indian market will have a commodity index (that may be tradable) for the world to look at, similar to ones in the developed countries,” he said.
FMC powers
The move to arm FMC with more power would give retail investors a platform to play safe, by way of portfolio management that is restricted now. Further, new product innovations like option on mini futures and structured products that are very popular in the capital market might be replicated in the commodity market if FMC wishes to do so, he said.
“Also, FMC can levy penalty, charge fees, take their own decisions like SEBI and can allow new product developments and amendments, enabling the decision making process to be faster in the much-needed commodity market,” Kannan said.
No comments:
Post a Comment