Ministry favours easier FDI norms for comexes

Higher cap on single investor likely; FMC supports move.

Foreign investment guidelines for commodity exchanges are expected to be more liberal than those for stock exchanges.

While commodity exchanges are expected to have the same overall sectoral cap of 49 per cent for foreign investment "� 26 per cent foreign direct investment (FDI) and 23 per cent for foreign institutional investors (FIIs) "� the five per cent cap on a single investor may be relaxed.

The Reserve Bank of India and the Securities and Exchange Board of India had last week announced foreign investment norms for stock exchanges and other infrastructure companies like depositories and clearing corporations.

The thinking in the ministry of consumer affairs is that on-line commodity exchanges were allowed to start operations with a "open tender and ownership pattern" and their corporate structure was known when they were given licences in 2003.

Forward Markets Commission Chairman S Sundareshan said the regulator was examining the norms for stock exchanges and would send its recommendations to the consumer affair ministry in the next three to four weeks.

He said that the new-age commodity exchanges were growing at a faster rate than anticipated and any new guideline should be suitable for exchanges.

FMC had earlier frozen the equity pattern of all exchanges till new guidelines on foreign investment were framed.

At present, Financial Technologies holds 64 per cent in MCX (Multi Commodity Exchange Ltd) and Fidelity holds around 9 per cent.

In Ncdex (National Commodity & Derivatives Exchange), Goldman Sachs holds 7 per cent stake.