SEBI moots spot exchange for agri, non-agri commodities

Tarun SharmaMoneycontrolThe Securities and Exchange Board of India (SEBI) has written to the government proposing a spot market for agri and non-agri commodities. There is no spot market for commodities at present following the implosion of the National Spot Exchange Limited (NSEL) over the payment default in 2013.A spot market is crucial to efficient price discovery for the futures market.SEBI Chairman UK Sinha proposed a framework for spot market in the recent meeting of Financial Stability Development Council (FSDC), a source told Moneycontrol.The source said that FSDC is open to the idea.Last week, SEBI had sought recommendations from exchanges for the framework for spot exchanges. The source said that exchanges, too, are open to the idea as they see immense potential for it.It is expected that the Budget may see an announcement about a government-appointed expert to oversee the guidelines for a spot market. The source said that the government was thinking of an integrated market in which there can be spot trading as well as futures trading. The source said the Commodity Derivative Advisory Committee Chairman had written to SEBI on the need for a spot market.