Financial services major Kotak group may soon be allowed to buy majority stake in the Ahmedabad Commodity Exchange, sources said.
The commodity market regulator Forward Markets Commission (FMC) is believed to have decided to allow the group to acquire stake in the regional commodity exchange, sources said.
"(The) FMC will soon seek the approval of the Ministry of Consumer Affairs to give the nod," a source said.
Kotak, which had approached the FMC for approval in 2008, could not go ahead with its acquisition plans in the absence of approval from the market regulator.
The decision was delayed as the FMC wanted to give the clearance on the basis of new guidelines for the regional exchanges. Since the guidelines have not yet been finalised, the regulator is likely to address the Kotak issue separately, the source said.
When contacted, FMC Chairman B C Khatua admitted that "the regulator was examining Kotak's proposal".
"We are addressing the Kotak issue on a case to case basis as the guidelines on regional exchanges could not get through due to delay in amending the Forward Contracts (Regulation) Act," he said.
The Ahmedabad Commodity Exchange, which deals in castor seeds futures, has an average daily trading volume of about 5,000 tonnes. Though Kotak is seeking to buy 51 per cent stake in the exchange, it is ready to go for a smaller equity if FMC fixes a lower cap on the promoter's holding.
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Sources said Kotak has plans to convert the regional exchange to a national one after getting approval of the market regulator.
The Kotak group is one of the leading players in the financial services sector having presence in banking, life insurance, stock broking, mutual funds and investment banking.
In India, there are three national level exchanges MCX, NCDEX and NMCE and 19 regional bourses.