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

Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Election 2014

Election 2014

Kashmiris wary as Modi challenges for power.  Full Article 

Facebook's Performance

Facebook's Performance

Facebook Q1 revenue grows 72 percent on rising mobile ads.  Full Article 

Earnings Season

Earnings Season

Bharti Infratel Q4 net profit jumps 64 percent.  Full Article 

Monsoon Forecast

Monsoon Forecast

South Asia monsoon seen below-average to average in 2014 - WMO.  Full Article 

Solar Dispute

Solar Dispute

Green groups urge U.S. to drop solar trade case against India.  Full Article 

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

Rice Exports

Rice Exports

India may cede top rice exporter spot under Southeast Asian price onslaught.  Full Article 

Reuters India Mobile

Reuters India Mobile

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