Equity recast likely for 4th comex

The MMTC-Indiabulls-promoted national level commodity exchange may have to change its proposed equity structure. Indiabulls may have to bring down its equity holding from 74 per cent for obtaining the clearance from the Forward Markets Commission (FMC) for the country's fourth commodity exchange.

The proposal is under consideration as a commodity exchange promoted by a broker, Indiabulls, and a market player, MMTC, may face regulatory issues.

"This is a corporate governance issue and we are studying it.

But they would probably have to bring down their equity participation. However, nothing has been finalised yet," said FMC Chairman B C Khatua.

In the case of existing exchanges, there are no spelt out norms for equity holding by promoters or local market players.

The proposed fourth exchange by state-run MMTC and brokerage house Indiabulls may find it difficult to get regulatory nod in the absence of specific guidelines. MMTC and

Indiabulls plan to set up a special purpose vehicle (SPV) for the exchange, with the public sector firm holding a minority stake of 26 per cent and Indiabulls 74 per cent.

On the new FDI norm to cap single holding to five per cent in commodity exchanges, Khatua said that investors would be given appropriate time as divestment takes time.

It depends on the time period granted to foreign investors to bring down their individual holding to 5 per cent, he added.