FMC moves to strengthen corporate governance of exchanges

MUMBAI Sun Sep 15, 2013 8:35am IST

A man moves an advertising poster bearing the MCX-SX logo at their Exchange Square building in Mumbai February 11, 2013. REUTERS/Vivek Prakash/Files

A man moves an advertising poster bearing the MCX-SX logo at their Exchange Square building in Mumbai February 11, 2013.

Credit: Reuters/Vivek Prakash/Files

Related Topics

MUMBAI (Reuters) - The Forwards Market Commission (FMC) has moved to strengthen corporate governance of commodity exchanges by issuing guidelines to restrict board representation by promoter members.

Under the guidelines, a promoter of an exchange cannot have board representation higher than their total shareholding, capped at 26 percent at the end of the fifth year of operation, the commodity regulator said late on Friday.

These revised guidelines follow the National Spot Exchange Ltd (NSEL), MCX-SX's affiliated commodity exchange, abruptly suspending trading in August. NSEL has since struggled to square off outstanding contracts worth over 55 billion rupees.

The regulator has asked exchanges that the shareholding of all commodity exchanges be modified with a view to ensuring a broad-based board representation of all classes of shareholders.

The guidelines mandate shareholder classes including government companies, banks, public financial institutions, co-operative societies, warehousing companies and the stock exchange owning the commodity exchange must form at least half of the total board of directors.

The regulator has asked all exchanges to incorporate the provisions of the guidelines in their bye-laws and submit a proposal to the FMC to seek approval of the appointment of directors as per these guidelines by September 30.

(Reporting by Swati Bhat)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Republic Day

Reuters Showcase

RK Laxman Dead

RK Laxman Dead

'Common Man' cartoonist RK Laxman dead at 93  Full Article 

Banking Revolution

Banking Revolution

India turns to corner shops, mobile phones for banking revolution.  Full Article 

Nuclear Group

Nuclear Group

China urges India to take steps to satisfy standards of NSG  Full Article 

Gold Market

Gold Market

Chinese gold demand holds up ahead of holiday, Indian buying weak  Full Article 

India-U.S. Relations

India-U.S. Relations

Column - U.S. and India should join to balance China's rise  Full Article 

Padma Bhushan

Padma Bhushan

India honours Bill Gates with civilian award  Full Article 

Fashionable Modi

Fashionable Modi

When Modi met Obama, his name was all over - his suit  Full Article 

New Greek PM

New Greek PM

Greek leftist Tsipras sworn in as PM to fight bailout terms  Full Article 

Australian Open

Australian Open

Venus fireworks illuminate Australia Day  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage