Arun Jailtey: Curb manipulation

Mumbai: Formalising the merger of the Forward Markets Commission (FMC) under Sebi’s regulatory jurisdiction on Monday, Union finance minister Arun Jaitley said the “markets thrive where there is confidence and integrity. People expect systems in place and transparency so that markets are free from manipulation.”

He said the amalgamation of FMC and Sebi (that he had promised in his Union Budget), would bring convergence of regulations in the commodities and equity derivatives markets.

“The merger will increase the economies of scope and scale as there are strong commonalities between all kinds of trading. I am sure that Sebi is prepared to regulate the commodity derivatives market,” he added.

Sounding a note of caution he said, “Since the physical market  for commodities was widespread, fragmented and unregulated for certain goods, Sebi needs to have a proper mechanism to capture any aberrations in the physical market that would disrupt the derivatives market.”

He said farmers, producers and consumers need to have confidence that derivatives market is free from manipulations and market abuses. Sebi chairman U.K. Sinha said the first priority of the regulator would be to develop confidence in the commodities market.