Govt to announce guidelines on FDI, FII in commodity exchange soon

Mumbai, Jan 10 (UNI) The government is all set to announce guidelines on the FDI and FII norms for commodity exchanges.

Talking to media on the sidelines of 6th National Conference of Commodity Exchanges here today, Department of Consumer Affairs Secretary Yashwant Bhave said ''The Government will come up with the guidelines for FDI and FII norms for the sector within a timeframe of 4-6 weeks.'' Commenting on the Reserve Bank of India's circular (RBI) on Tuesday asking banks to maintain margin requirements for exposure to commodities market just as in case of stock markets, he said ''We're examining the RBI's stand on the subject.'' However, expressing his own opinion on the topic, Forward Markets Commission (FMC) Chairman S Sundareshan said ''There are some differences between stock market and commodity market keeping in view their perceptions.'' While the job of stock market's regulator is to ensure that the interests of small investors are fully protected, it is the marginal farmers' interest that needs to be taken care of in the case of commodities market and hence both must be seen with different angles, he said.

In its notification, the RBI had said that for exposure in the commodity markets, banks would have to maintain a minimum margin of 50 per cent which included 25 per cent cash margin for guarantees issued by them to commodity brokers.

Prior to it, addressing the 6th National Conference of Commodity Exchanges, Mr Sundereshan said that the FMC had suggested banks, FIIs and MFs to participate in the commodity futures market to strengthen the market and introduce more liquidity.

UNI