Regulator supports small comexes

In sharp contrast to the Securities and Exchange Board of India's (Sebi) move to curb regional bourses, the Foward Markets Commission (FMC) on Monday favoured letting such exchanges flourish.

"We want regional exchanges to thrive though there are three national commodity exchanges," FMC chairman S Sundareshan said while inaugurating the future trading of raw jute at the East India Jute & Hessian Exchange (EIJ&HE) on Monday.

He said regional commodity exchanges inherited traditional business expertise and domain knowledge for them to thrive.

There are 21 regional commodity exchanges and three national exchanges, The Multi Commodity Exchange of India (MCX), the National Commodity and Derivatives Exchange of India (NCDEX) and the National Multi Commodity Exchange of India (NMCE).

The FMC also favoured EIJ&HE adding new commodities for trading which would add to their viability.

"EIJ&HE can add more commodities subject to meeting the FMC criteria," Sundareshan said.

A Sebi committee in a recent report had recommended either de-recognising regional stock exchanges or letting them voluntarily wind up.

Those that existed would have to collectively choose either the Bombay Stock Exchange (BSE) or the Inter-Connected Stock Exchanges (ICSE) model.

If Sebi accepted the recommendations, the regional stock exchange would face an identity crisis as it would turn out to be an extension of either the BSE or the ICSE.

The step comes in the wake of significant decline in importance of regional exchanges after the National Stock Exchange's nationwide presence.