Mumbai: Capital markets regulator Sebi said it expects the proposed merger of commodities regulator FMC with it to be completed by September-end and assured that that there will be no layoffs after the amalgamation.
“We are evaluating the gaps which are there (in Sebi-FMC merger). We will be able to take over the responsibility by end of September,” Sebi chairman U K Sinha told reporters after its board meeting.
He further said: “No jobs will be lost (after the merger). Law passed by Parliament says that those in FMC can be eligible for induction into Sebi or else they will be going back to government (jobs).”
Sinha said that after FMC’s merger with Sebi, the capital market watchdog’s approval is required if a commodity exchange wants to function as equity bourse as the process would not be automatic.
“We are reviewing each and every circular issued by FMC and each every guideline issued by them and we are going to have our own rules and regulations. Only after, we have finalised them we hope within two months from now we will be having that ready,” he said.
When asked about the government’s funding support for FMC post merger, Sinha said Sebi hopes to get initial support from it. As of now, while FMC gets government support, Sebi doesn’t.Sinha said: “Sebi is proud of the fact that it has never received any support from the government. We got a loan from government in its formative years but that was returned by Sebi with interest.
Maybe for initial time period we will require support, otherwise we do not require support.” Announced by Finance Minister Arun Jaitley in Budget for 2015-16, the merger will help streamline regulations and curb wild speculations in commodities market, while facilitating participation of domestic and foreign institutional investors and launch of new products such as options.
The Sebi board today took stock of the progress on the merger and was apprised of the issues being faced in this process, Sinha said.
Mumbai-headquartered FMC (Forward Markets Commission) was set up in 1953 under the Forward Contracts (Regulation) Act (FCRA) as a statutory body under the aegis of Consumer Affairs Ministry. It was brought under Finance Ministry in 2013.
In the beginning, FMC was only regulating regional commodity exchanges and its role was expanded after the emergence of national electronic trading platform in 2000.
Seeking to make FMC an autonomous body, the government had proposed amendments to FCRA in 2010 but the concerned bill could not be taken up in the Parliament.
Currently, there are four national and six regional bourses for commodity futures in the country.