Phased entry for MFs, FIIs : FMC Chairman

Kochi, Dec 8 (UNI) Forward Markets Commission (FMC) Chairman S Sundareshan today said the FMC was favouring a phased entry for MFs and FIIs in the commodity futures markets.

Speaking to mediapersons after a conference of the members of National Commodity Exchanges in south zone here, Mr Sundareshan said the organisation favoured a phased entry of MFs, FIIs and banks to facilitate retail participation in the comodities markets.

Initially, they would be allowed in bullion, oil and metal sectors, he said adding that the proposal was under consideration with the Ministry of Finance for approval.

Making it clear that the portfolio management services and advisory services would not be allowed in the commodity market, the Chairman said there were chances of misuse of funds by the brokers by investing in commodities of their choice without the consent of the investor.

Mr Sundareshan said guidelines for such services would be drafted in the near future.

He said the FMC undertook the primary function of price discovery and price risk managemnt to maintain the buoyancy of the commission.

The liquidity in the market was quite high denoting that the farmers were benefitting from the futures trading, the Chairman said.

To strengthen its regulatory arm, FMC was also seeking collaboration with regulators in other countries, he added.

UNI MA ROY 1730