MCX electricity futures are likely to be regulated by the Central Electricity Regulatory Commission and the existing regulator, Forward Markets Commission, according to a senior power ministry official.
The commodity exchange launched weekly and monthly electricity futures a month ago, after getting FMC approval. However, newly launched Power Exchange India Ltd had objected to the jurisdiction of FMC for the purpose of regulation of the contract, demanding that CERC alone should regulate the contract. PXIL is promoted by National Commodity and Derivatives Exchange and National Stock Exchange.
Current CERC guidelines on power market regulation has no mention of futures trading in power as it did not exist in the country at the time of framing the rules, the official said.
“It requires regulation for orderly development of any new market, for which the regulator has already started the work on new regulatory norms to accommodate futures trading,” the official told NewsWire18.
Once the norms are finalised, CERC will also have a role, along with FMC, in regulation of the contract, he said.
“There will be transitional provision in the new norm to accommodate the running contract,” he said.
New norms are likely to take at least three months to come into existence, he said.