The government has decided to cap the number of national commodity exchanges at eight to foster sustained growth of the commodity futures market.
“The consumer affairs ministry, in consultation with the sector regulator, FMC, has decided to allow only eight commodity exchanges to function at the national level,” a senior official told PTI.
At present, four national exchanges – MCX, NCDEX, NMCE and ICEX – are operating at national level, while the remaining two – Ahmedabad Commodity Exchange (ACE) and the Universal Commodity Exchange (UCE) – are yet to be launched.
Recently, Gontermann Peipers (India), promoted by Pramod Mittal of the Ispat group, placed an application with the Forward Markets Commission (FMC) for setting up a national commodity exchange.
“If UCE and Gontermann’s get permission from FMC, then there would be a total of seven national commodity exchanges in the country,” the official said, noting that the number of national commodity bourses are higher as compared to three stock exchanges in the securities market.
Though there is no such cap for stock exchanges in the equity market, the Securities and Exchange Board of India (Sebi) has permitted only NSE, BSE and MCX-SX to function at the national level, the official said.
Meanwhile, an FMC official said: “It was felt that the mushrooming of national commodity exchanges would not be a good sign, as quality growth was more necessary than just having a mere number of exchanges.”
