MANU/SPRL/0216/2015

Ministry : Securities and Exchange Board of India

Department/Board : SEBI

Press Release No. : 216/2015

Date : 24.08.2015

SEBI Board Meeting.

The SEBI Board met in Mumbai today and took the following decisions:

A. FMC - SEBI merger - Proposals for commodity derivatives exchanges and their members

(1) The Board approved the draft amendment to the regulations to be notified on September 28, 2015 pursuant to the proposed repealing of the Forward Contracts Regulation Act, 1952 (FCRA) making way for merger of Forward Market Commission with SEBI. These regulations will enable functioning of the commodities derivatives market and its brokers under SEBI norms and integration of commodities derivatives and securities trading in an orderly manner.

(2) The draft regulations provide for compliance of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 (SECC Regulations) which are currently required to be complied with by stock exchanges.

(3) The major compliances include norms related to net-worth, shareholding norms, composition of board, corporatisation and demutualisation and setting up of various committees, turnover, infrastructure etc. To ensure non-disruptive transition, SEBI has prescribed following timelines for aligning to the different provisions of SECC Regulations:

(i) Corporatization and demutualization of regional commodity derivatives exchanges - 3 years from the date of merger.

(ii) Availing services of a clearing corporation - 3 years from the date of merger. Till then, clearing may continue with the current arrangement. However, the Commodity Exchanges shall ensure guarantee for the settlement of trades including good delivery.

(iii) Net-worth - timeline as provided by FMC, i.e. May 05, 2017, for national commodity derivatives exchanges and within 3 years from the date of merger for regional ones.

(iv) Shareholding - timeline as provided by FMC, i.e., May 05, 2019, for national exchanges and within 3 years from the date of merger for regional exchanges.