The Forward Markets Commission (FMC) has merged with capital markets watchdog Securities and Exchange Board of India (SEBI) with Finance Minister Arun Jaitley ringing the customary stock market bell to formalise the amalgamation. Sebi whole-time member Rajeev Kumar Agarwal would oversee the commodities market regulation in the merged entity under the overall guidance of the UK Sinha, Sebi Chairman.
Sebi was set up in 1988 as a non-statutory body for regulating the securities markets. It became an autonomous body in 1992 with fully independent powers. FMC, on the other hand, has been regulating commodities markets since 1953, but lack of powers has led to wild fluctuations and alleged irregularities remaining untamed in this market segment. The commodities market has been known to be more prone to speculative activities compared to the better-regulated stock market.
The announcement for the merger was made by the Finance Minister in his Budget speech earlier this year. This is the first major case of two regulators being merged.
A unified regulator for commodities and capital markets will help streamline monitoring of commodity futures trading and curb wild speculations. In the wake of a Rs 5,500-crore payment crisis at the National Spot Exchange Ltd, FMC was brought under Finance Ministry in 2013. Starting September 29,commodity brokers will need to increase their net worth and come under direct Sebi oversight.