SEBI not keen on regulating spot market for commodities

The Securities and Exchange Board of India (SEBI) is not keen on regulating the spot market for commodities, sources told Moneycontrol.

The country's market regulator is expected to suggest to the Finance Ministry that a separate agency be formed for monitoring the spot market.

“SEBI is not keen to regulate spot exchanges and the current framework of regulations also don’t permit the SEBI to regulate spot exchanges,” a source told Moneycontrol.

SEBI currently regulates only derivative contracts in commodities.

A commodity market expert said: “There should be multiple regulators to strengthen the spot market. For instance, something like a warehouse is not under the purview of SEBI.”

“The Finance Ministry should form a nodal agency like the RM Lodha Committee for PACL [Pearls Agrotech Corporation] disbursement,” said a source.

In December last year, SEBI ordered attachment of all assets of PACL and its nine promoters and directors for their failure to refund more than Rs 60,000 crore owed to investors.

PACL had raised money from the public in the name of agriculture and real estate businesses, promising big returns. The RM Lodha Committee is overseeing the disposal of PACL assets in order to refund the affected investors.

SEBI had recently met up with Finance Ministry officials for discussing the framework for a gold spot exchange.

Two companies, including BSE Ltd and a Delhi-headquartered company, have applied to SEBI for setting up gold spot exchanges.