Besides, the amalgamation of over six-decade old FMC with the Securities and Exchange Board of India (Sebi) would ensure that NSEL-like fiascoes are dealt with more effectively.
Finance Minister Arun Jaitley, who formalised the merger today by ringing the customary bell, said the amalgamation would bring convergence of regulations in the commodities and equity derivatives markets.
"The merger will increase the economies of scope and scale as there are strong commonalities between all kinds of trading. I am sure that Sebi is prepared to regulate the commodity derivatives market," he said.
Sebi Chairman U K Sinha said the first priority would be to develop confidence in the commodities market and then focus on development of the market by way of allowing participation by banks and foreign portfolio investors in this market.
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"We will be very cautious so as to avoid making mistakes in commodities trading, focusing on how to improve movement of prices and strengthen human resources," he said.
The Finance Minister said that markets thrive where there is confidence and integrity and this requires transparency and good regulations.
Even though the merger has been on the cards for 12 years, the move was expedited in the wake of the Rs 5,700-crore payment crisis at NSEL that affected many investors.
FMC came into existence in 1953 while Sebi was set up as a non-statutory body for regulating the securities markets in 1988 and became an autonomous body in 1992.