The forward markets commission has once again approached the finance ministry and the law ministry to look into who has jurisdiction over commodity exchange traded funds, reports Mitra Joshi and Kritika Saxena of CNBC-TV18.
Silver prices have surged this year, almost doubling to Rs 67,000 per kilogram in five months and this has asset management companies jumping to launch Silver Exchange Traded Funds.
But the question is: who will regulate these products? The FSDC has been asked to take a call.
DS Kolamkar, Member, Forward Markets Commission (FMC) said, We are in correspondence with SEBI and legal opinion shud be taken in this matter. The sanctity, the principle by the jurisdiction is divided among different regulators has to be maintained. And as of now they also referred to new institutional mechanism like FSDC to look into issues"
The Forward Markets Commission, which regulates commodities, feels it should regulate Silver ETFs. But in 2007, Finance Ministry gave SEBI jurisdiction over Gold ETFs. The FMC now wants the Ministry of Law and Justice to look into this matter again.
Kolamkar, " In the past four years since ETF is launched, we haven't raised any issues as how ETFs is being operated and whether any problems in it's functioning. Our issue with ETF and specially Commodity Linked ETF, it is our subject matter and our jurisdiction and not SEBI's."
FMC says it will abide by the Law Ministry's view on who should get regulate Commodity ETFs. It also hopes that since commodities come under FMC's purview, SEBI will consult with FMC when any Commodity Linked ETFs are launched in the future.
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