 "One licence for equity bourses, commexes likely")
The capital markets regulator, Securities and Exchange Board of India (Sebi), is in favour of granting a common licence to all exchanges. The issue was discussed by its panel of experts on Tuesday and the matter could be discussed at the main board meeting on June 17, sources said.
BSE and NSE have already applied for Sebi approval to launch the commodity segment on their platforms.
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A Sebi green signal would increase competition in the exchange space. The bourses already have the necessary technology platform and risk management frameworks. Although both the equity and commodity markets are now regulated by Sebi, market intermediaries still have to follow a different set of guidelines and requirements. Sebi has already initiated an exercise to integrate the two, following its absorption last year of the Forward Markets Commission (FMC).
“This is a right step to give recognition to exchanges to trade in all segments,” said J N Gupta, former executive director at Sebi and founder of SES, a proxy advisory. However for a smooth run, proper systems and risk management are needed, he added.
The issue was discussed in several meetings after the FMC merger in September. Experts say the move will bring down the cost of operations for exchanges.
"On a single registration, exchanges would be allowed to trade in all segments and asset classes. The next step in this direction would be to permit one licence for stock broking entities, which will lead to several benefits for end-investors,” said Alok Churiwala, vice-president of BSE Brokers Forum.
“Sebi is keen on bringing more depth into the commodities trade. It will be done in a gradual and phased manner, so the market isn’t disrupted in any way,” said a source.
Besides, Sebi's expert panel discussed the changes to the regulations relating to fund-raising by start-ups. "Committee suggested to reduce the minimum ticket size for participation in start-up initial public offerings (IPOs) to Rs 5 lakh from Rs 10 lakh currently," said a source who was the part of the meeting.
In August 2015, the Sebi had announced a new set of listing regulations for start-ups operating in the e-commerce space in sectors such as information technology (IT), data analytics and biotechnology. As per the norms, start-ups would be listed on a special Institutional Trading Platform (ITP) and only institutional investors and high net worth individuals (HNIs) will be able to trade on it. The retail investors were not allowed to invest in such issues as the markets regulator felt small retail investors need to be safeguarded against a higher level of risks associated with the platform. However, in last 10 months of its existence, the ITP platform has not seen even a single start-up lisiting. Infibeam, an e-commerce company that went for an IPO during the current calendar year, chose to list on main board instead of the ITP.
Once implemented, an exchange would have common registration for all segments — commodity, equity, currency, derivatives.
Sebi's committee has also asked exchanges to prepare a list of companies where no or little trade takes place. On BSE and NSE, 1,200 companies have been suspended for more than seven years.
The experts panel also discussed allowing of option trading in commodities. Sebi has several proposals with this regard and is considering the criteria for commodities in which options trade could be permitted. Once the panel is clear, the exchanges would be asked to propose commodities in this regard.