The Securities and Exchange Board of India (Sebi) Chairman UK Sinha said that the commodities market entities would get a timeframe of up to one year to adjust to the new regulations as they would have to follow the same norms that are applicable to their peers in the equity segment.
"In order to ensure that nothing is disrupted, there is no discontinuity... We are giving some timeframe so that they can adjust with the new regulations," Sinha said.
The Sebi Chief also said that the entire process has 'all been very well thought out' and the regulator has also brought out a handbook for the benefit of all entities by making them aware about various rules and regulations.
Sebi's Whole-Time Member Rajeev Kumar Agarwal would oversee the commodities market regulation in the merged entity under the overall guidance of the Sebi Chairman.
FMC, on the other hand, has been regulating commodities markets since 1953, but lack of powers has led to wild fluctuations and alleged irregularities remaining untamed in this market segment.
The commodities market has been known to be more prone to speculative activities compared to the better-regulated stock market, while illegal activities like 'dabba trading' have also been more frequent in this segment.
Besides, the high-profile NSEL scam has rocked this market in the recent past and the subsequent regulatory and government interventions in this case eventually led to the government announcing FMC's merger with Sebi.
This is the first major case of two regulators being merged, as against the relatively more frequent practice worldwide of creating new regulatory authorities, including by carving out new bodies from the existing entities.




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