Jaitley says will merge regulators Sebi and FMC

Finance Minister Arun Jaitley has announced that the Forward Markets Commission will be merged with the Securities and Exchange Board of India (Sebi). While Sebi is the regulator for the capital markets, the FMC oversees commodities markets.

Among other things, he said that this will help reduce wild speculation.

The move had been hinted at in the Economic Survey released on Thursday, although some ambiguity remained.

The document had noted with respect to strengthening the commodities regulator, “it should be addressed though more effective regulation along the lines of the recommendations made by the Financial Sector Legislative Reforms Commission (FSLRC).”

“In order to ensure that forward markets in commodities are well regulated and the Indian commodity futures market is compliant with international regulatory requirements, the regulatory framework for the commodity futures market needs to be strengthened at the earliest,” the Survey had said.

Such a process is likely to be a long-drawn out one and reportedly is likely to be implemented in phases, according to a source.

However, the move will first need an amendment of the Securities Contracts (Regulation) Act (SCRA) which does not currently include commodity derivatives under the definition of securities.

Securities and Exchange Board of India ( SEBI )