Views of Mr. Girish Dev, CEO and MD, Geofin Comtrade Ltd. on 'SEBI- FMC merger':
It is one of the most exciting moments in the regulatory architecture of our organised markets. Exciting, we say, because never before would have market participants so eagerly waited for themselves to be "regulated"!; generally regulations are met with skepticism. But, here with the autonomous SEBI taking over, it ushers in hope for Commodities derivatives markets to not only being revived, but drawing in more participants into these markets over the next few years. We are really keen to see how the regulations around warehouses / warehousing evolve as underlying commodities always remaining in physical form, it will remain a concern as to how SEBI can effectively wield control the quality & safe-keeping aspects of commodities i.e. unless there is convergence of WDRA & SEBI or at least the enabling regulations be in place for SEBI to directly govern the exchange deliverable commodities stored in WDRA warehouses. In the near future, we also expect market participants would urge SEBI to engage with regulators like FSSAI to incorporate market acceptable, realistic quality parameters for several of the exchange-deliverable Agri commodities.
In the immediate, we assess that SEBI's primary focus will be on establishing a very strong surveillance mechanism in the commodities derivatives segment. The biggest challenge for SEBI will be to evolve a transparent & robust mechanism therein, given that the commodity SPOT markets presently, are not operating in any electronic pan-India format, neither are they under the purview of SEBI. The next year, we hope and desire that SEBI looks into the progressive aspects of Commodities derivatives market viz. remove CTT for couple of years (at least), allow Options trading, incentivise Hedgers etc.
As an intermediary, we don't anticipate significant changes in the working or operations as in the major areas of risk-management, margining and compliance, during the (last) FMC regime itself, quite a lot of synchronisation with stock exchange practices were established. However, we expect strengthening of the investor grievance redressal mechanisms at every intermediary's end.