FMC considering one-stop clearing house for commexes

Written by Sandip Das | Panaji | Updated: Feb 22 2014, 09:02am hrs
Commodity market regulator Forward Markets Commission (FMC) is considering a proposal to set up a single or common clearing house for all existing commodity exchanges besides measures to improve corporate governance.

We are examining the possibility of having a single-clearing corporation for settling trade at all the commodity exchanges. It would take some more time before it becomes reality, Ramesh Abhishek, chairman, FMC, said at the Pulses Conclave 2014, organised by the India Pulses and Grains Association.

Following the National Spot Exchange (NSEL) payment crisis, capital market regulator Sebi had instructed BSE-promoted Central Depository Services (CSDL) and National Securities Depository (NSDL) to stay away from clearing commodity trade.

NCDEX, which was using the services of CDSL, recently launched its own in-house clearing house Comtrack, resulting in lower cost for traders.

On the issue of commodity exchanges managing a single clearing house when equity exchanges have separate clearing corporations, Abhishek said that there are challenges, We would work out a strategy for having a unified clearing corporation.

On the improvement in corporate governance in commodity exchanges, Abhishek said the FMC is examining the shareholding pattern of exchange and the role of anchor investors besides inducting experts into the commission.

We are looking at proposed modification in corporate governance, which needs to be transparent and strong. We are examining the shareholding pattern of exchanges and the role of anchor investors," he said. He also said that there should more competition in the commodity markets and new players should come up with innovative products for attracting investors.

As part of expanding its role, FMC would be soon recruiting specialized people to help the regulator in day-to-day functioning.